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INSMED Inc

INSMED IncINSMEarnings & Financial Report

Nasdaq · Health Care · Pharmaceutical Preparations

Insmed Inc. is a global biopharmaceutical firm focused on developing and commercializing innovative therapies for patients with serious rare diseases that have high unmet medical needs. Its key offerings target pulmonary and endocrine rare disorders, serving markets across North America, Europe, and Asia Pacific.

What changed in INSMED Inc's 10-K — 2024 vs 2025

Top changes in INSMED Inc's 2025 10-K

705 paragraphs added · 669 removed · 534 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

186 edited+79 added−63 removed250 unchanged
We make available on our website at http://www.insmed.com, free of charge, copies of these reports as soon as reasonably practicable after filing, or furnishing them to, the SEC. The public can also obtain materials that we file with the SEC through the SEC's website at http://www.sec.gov.
We make available on our website at http://www.insmed.com, free of charge, copies of these reports as soon as reasonably practicable after filing them with, or furnishing them to, the SEC. The public can also obtain materials that we file with the SEC through the SEC's website at http://www.sec.gov.
Government Regulation Orphan Drug Designation United States Under the Orphan Drug Act (ODA), the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition, defined as a disease or condition for which the drug is intended affects fewer than 200,000 people in the US or for which there is no reasonable expectation that the cost of developing and making available in the US a drug for such disease or condition will be recovered from US sales of such drug, if it meets certain criteria specified by the ODA and FDA.
Government Regulation Orphan Drug Designation United States Under the Orphan Drug Act (ODA), the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition, generally defined as a disease or condition that affects fewer than 200,000 people in the US or for which there is no reasonable expectation that the cost of developing and making available in the US a drug for such disease or condition will be recovered from US sales of such drug, if it meets certain criteria specified by the ODA and FDA.
We plan to rely primarily on third-party manufacturers and suppliers for the commercial manufacture and supply of most product candidates that we commercialize. ARIKAYCE is manufactured currently by Resilience Biotechnologies Inc. (Resilience) (formerly Therapure Biopharma Inc.) in Canada at a 200 kilogram (kg) scale. For additional information about our agreement with Resilience, see License and Other Agreements—ARIKAYCE-related Agreements .
We plan to rely primarily on third-party manufacturers and suppliers for the commercial manufacture and supply of most product candidates that we commercialize. ARIKAYCE is manufactured currently by 15 Resilience Biotechnologies Inc. (Resilience) (formerly Therapure Biopharma Inc.) in Canada at a 200 kilogram (kg) scale. For additional information about our agreement with Resilience, see License and Other Agreements—ARIKAYCE-related Agreements .
Competitors may use this publicly available information to gain knowledge regarding the progress of development programs. Other Post-approval Regulatory Requirements Once an NDA or BLA is approved, a product will be subject to certain post-approval requirements, including those relating to advertising, promotion, adverse event reporting, recordkeeping, and cGMP, as well as registration, listing, and inspection.
Competitors may use this publicly available information to gain knowledge regarding the progress of development programs. 29 Other Post-approval Regulatory Requirements Once an NDA or BLA is approved, a product will be subject to certain post-approval requirements, including those relating to advertising, promotion, adverse event reporting, recordkeeping, and cGMP, as well as registration, listing, and inspection.
Under section 351(k) of the PHSA, a BLA for a biosimilar product may be approved based upon a showing that the proposed product is highly similar to a previously licensed product, known as the reference product, notwithstanding minor differences in clinically inactive components; and there are no clinically meaningful differences between the proposed biosimilar product and 25 the reference product in terms of safety, purity, and potency.
Under section 351(k) of the PHSA, a BLA for a biosimilar product may be approved based upon a showing that the proposed product is highly similar to a previously licensed product, known as the reference product, notwithstanding minor differences in clinically inactive components; and there are no clinically meaningful differences between the proposed biosimilar product and the reference product in terms of safety, purity, and potency.
Lamira is a portable nebulizer that enables aerosolization of liquid medications via a vibrating, perforated membrane, and was designed specifically for ARIKAYCE delivery. The FDA has designated ARIKAYCE as an orphan drug and a Qualified Infectious Disease Product (QIDP) for the treatment of NTM lung disease. Orphan designated drugs are eligible for seven years of exclusivity for the orphan indication.
Lamira is a portable nebulizer that enables aerosolization of liquid medications via a vibrating, perforated membrane, and was designed specifically for ARIKAYCE delivery. The FDA has designated ARIKAYCE as an orphan drug and a Qualified Infectious Disease Product (QIDP) for NTM lung disease. Orphan designated drugs are eligible for seven years of exclusivity for the orphan indication.
All clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s investigational device exemption, or IDE, regulations that govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of study review and approval, informed consent, recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.
All clinical investigations of devices to determine safety and effectiveness 28 must be conducted in accordance with the FDA’s investigational device exemption, or IDE, regulations that govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of study review and approval, informed consent, recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.
Our ability to obtain and maintain trademark registrations will in certain geographical locations depend on making use of the mark in commerce on or in connection with our products and approval of the trademarks for our products by regulatory authorities in each country. License and Other Agreements Multi-program Agreements PPD Development, L.P.
Our ability to obtain and maintain trademark registrations will in certain geographical locations depend on making use of the mark in commerce on or in connection with our products and approval of the trademarks for our products by regulatory authorities in each country. 18 License and Other Agreements Multi-program Agreements PPD Development, L.P.
The agreements may also be terminated under certain other circumstances, including by either party due to a material uncured breach of the other party or the other party’s insolvency. Patheon Inc.'s supply obligations are governed by individual product agreements entered into from 19 time to time under the master commercial manufacturing services agreement.
The agreements may also be terminated under certain other circumstances, including by either party due to a material uncured breach of the other party or the other party’s insolvency. Patheon Inc.'s supply obligations are governed by individual product agreements entered into from time to time under the master commercial manufacturing services agreement.
The FDA must respond within 60 days of receipt of the request. If granted, the applicant receives intensive guidance on efficient drug development, intensive involvement of senior managers and experienced review and regulatory health project management staff in a proactive, collaborative, cross-disciplinary review, rolling review, and other actions to expedite review.
The FDA must respond within 60 days of receipt of the request. If granted, the applicant receives intensive guidance on efficient drug development, intensive involvement of senior managers and experienced review and regulatory health project 26 management staff in a proactive, collaborative, cross-disciplinary review, rolling review, and other actions to expedite review.
FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. 27 Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain compliance with cGMP.
FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain compliance with cGMP.
(a wholly-owned subsidiary of Thermo Fisher) and related agreements In January 2024, we entered into certain agreements with Patheon Inc. related to the manufacture and supply of brensocatib by Patheon Inc. for our anticipated long-term commercial needs. Under these agreements, we are required to deliver to Patheon Inc. the active pharmaceutical ingredients needed to manufacture brensocatib.
(a wholly-owned subsidiary of Thermo Fisher) and related agreements In January 2024, we entered into certain agreements with Patheon Inc. related to the manufacture and supply of brensocatib by Patheon Inc. for our long-term commercial needs. Under these agreements, we are required to deliver to Patheon Inc. the active pharmaceutical ingredients needed to manufacture brensocatib.
The agreements provide for Patheon to manufacture and supply ARIKAYCE for our anticipated commercial needs. Under these agreements, we are required to deliver to Patheon the required raw materials, including active pharmaceutical ingredients, and certain fixed assets needed to manufacture ARIKAYCE. Patheon's supply obligations will 18 commence once certain technology transfer and construction services are completed.
The agreements provide for Patheon to manufacture and supply ARIKAYCE for our anticipated commercial needs. Under these agreements, we are required to deliver to Patheon the required raw materials, including active pharmaceutical ingredients, and certain fixed assets needed to manufacture ARIKAYCE. Patheon's supply obligations will commence once certain technology transfer and construction services are completed.
In addition, we have agreed to pay AstraZeneca tiered royalties ranging from a high single-digit to mid-teens on net sales of any approved product based on brensocatib and one additional payment of $35.0 million upon the first achievement of $1.0 billion in annual net sales.
In addition, we have agreed to pay AstraZeneca tiered royalties ranging from high single-digit to mid-teens on net sales of any approved product based on brensocatib and one additional payment of $35.0 million upon the first achievement of $1.0 billion in annual net sales.
If we elect to develop brensocatib for a second indication, we will be obligated to make an additional series of contingent milestone payments totaling up to $42.5 million, the first of which occurs at the initiation of a Phase 3 trial in the additional indication. We are not obligated to make any additional milestone payments for additional indications.
If we elect to develop brensocatib for a second indication, we will be obligated to make an additional series of contingent milestone payments totaling up to $42.5 million, the first of which occurs at the initiation of a Phase 3 trial in the additional indication. We are not obligated to make milestone payments for additional indications.
Our master commercial manufacturing services agreement with Patheon Inc. will remain in effect for a fixed initial term, after which it will continue for successive renewal terms unless either we or Patheon Inc. have given written notice of termination.
Our master commercial manufacturing services 19 agreement with Patheon Inc. will remain in effect for a fixed initial term, after which it will continue for successive renewal terms unless either we or Patheon Inc. have given written notice of termination.
QIDP designation provides an additional five years of exclusivity for the designated indication. The FDA granted a total of 12 years of exclusivity in the indication for which ARIKAYCE was approved. ARIKAYCE also has been included in the international treatment guidelines for NTM lung disease treatment.
QIDP designation provides an additional five years of exclusivity for the designated indication. The FDA granted a total of 12 years of exclusivity in the indication for which ARIKAYCE was approved. 10 ARIKAYCE also has been included in the international treatment guidelines for NTM lung disease.
Among patients who achieved culture conversion by Month 6, more patients in the ARIKAYCE arm achieved the first of their two required monthly negative cultures for clinical conversion at Month 1 versus the comparator arm (74.3% vs. 46.7%).
Among patients who achieved culture conversion by Month 6, more patients in the ARIKAYCE arm achieved the first of their two required monthly negative cultures for clinical conversion at Month 1 versus the comparator arm 11 (74.3% vs. 46.7%).
Resilience In February 2014, we entered into a contract manufacturing agreement with Therapure Biopharma Inc., which has been assumed by Resilience, for the manufacture of ARIKAYCE, on a non-exclusive basis, at a 200 kg scale.
Resilience 20 In February 2014, we entered into a contract manufacturing agreement with Therapure Biopharma Inc., which has been assumed by Resilience, for the manufacture of ARIKAYCE, on a non-exclusive basis, at a 200 kg scale.
Drug pricing is an active area for regulatory reform at both the federal and state levels, and additional significant changes to current drug pricing and reimbursement structures in the US could be forthcoming. 32 Different pricing and reimbursement schemes exist in other countries.
Drug pricing is an active area for regulatory reform at both the federal and state levels, and additional significant changes to current drug pricing and reimbursement structures in the US could be forthcoming. Different pricing and reimbursement schemes exist in other countries.
A license for marketing authorization may not be granted if the quality management methods and post marketing safety management methods applied with respect to the pharmaceutical product fail to conform to the standards stipulated in the ordinances promulgated by the MHLW.
A license for marketing 32 authorization may not be granted if the quality management methods and post marketing safety management methods applied with respect to the pharmaceutical product fail to conform to the standards stipulated in the ordinances promulgated by the MHLW.
In October 2020, the European Commission (EC) approved ARIKAYCE for the treatment of nontuberculous mycobacterial (NTM) lung infections caused by MAC in adults with limited treatment options who do not have cystic fibrosis (CF).
In October 2020, the European Commission (EC) approved ARIKAYCE Liposomal for the treatment of nontuberculous mycobacterial (NTM) lung infections caused by MAC in adults with limited treatment options who do not have cystic fibrosis (CF).
Consistent with our expectations, the FDA and the Pharmaceuticals and Medical Devices Agency (PMDA) in Japan confirmed that they would not consider a label expansion for ARIKAYCE based on data from the ARISE study alone.
Consistent with our expectations, the FDA and the Pharmaceuticals and Medical Devices Agency in Japan confirmed that they would not consider a label expansion for ARIKAYCE based on data from the ARISE study alone.
At day 180 the CHMP can also request the involvement of a Scientific Advisory Group (SAG), where the applicant is given the opportunity to present data supporting the application and addressing the specific questions addressed by the CHMP to the SAG.
At day 180 the 30 CHMP can also request the involvement of a Scientific Advisory Group (SAG), where the applicant is given the opportunity to present data supporting the application and addressing the specific questions addressed by the CHMP to the SAG.
We are also advancing our pre-clinical research programs encompassing a wide range of technologies and modalities, including gene therapy, AI-driven protein engineering, protein manufacturing, RNA end-joining, and synthetic rescue.
We are also advancing pre-clinical research programs encompassing a wide range of technologies and modalities, including gene therapy, AI-driven protein engineering, protein manufacturing, RNA end-joining, and synthetic rescue.
European Union The EMA grants orphan drug designation to promote the development of drugs or biologics (1) for life-threatening or chronically debilitating conditions affecting not more than five in 10,000 people in the EU, or (2) for life threatening, seriously debilitating or serious and chronic condition in the EU where, without incentives, sales of the drug in the European Economic Area (the EU plus Iceland, Lichtenstein and Norway) (EEA) are unlikely to be sufficient to justify its development.
European Union The EC grants orphan drug designation to promote the development of drugs or biologics (1) for life-threatening or chronically debilitating conditions affecting not more than five in 10,000 people in the EU, or (2) for life threatening, seriously debilitating or serious and chronic condition in the EU where, without incentives, sales of the drug in the European Economic Area (the EU plus Iceland, Lichtenstein and Norway) (EEA) are unlikely to be sufficient to justify its development.
A drug sponsor may request that the FDA designate its product as a QIDP at any time prior to NDA submission. 24 Additionally, the FDA may approve eligible drugs under the LPAD.
A drug sponsor may request that the FDA designate its product as a QIDP at any time prior to NDA submission. Additionally, the FDA may approve eligible drugs under the LPAD.
Additionally, we believe that TPIP may be associated with fewer side effects, including severity and/or frequency of cough, headache, throat irritation, nausea, flushing and dizziness that are associated with high initial drug levels and local upper airway exposure when using current inhaled prostanoid therapies. We believe TPIP may offer a differentiated product profile for PH-ILD and PAH.
Additionally, we believe that TPIP may be associated with fewer side effects, including severity and/or frequency of cough, headache, throat irritation, nausea, flushing and dizziness that are associated with high initial drug levels and local upper airway exposure when using current inhaled prostanoid therapies. We believe TPIP may offer a differentiated product profile for PH-ILD, PAH, PPF and IPF.
A three-year period of non-patent exclusivity is granted for a drug product that contains an active moiety that has been previously approved, when the application contains reports of new clinical investigations (other than bioavailability studies) conducted or sponsored by the sponsor that were essential to approval of the application, for example, for new indications, dosages, strengths or dosage forms of an existing drug.
A three-year period of non-patent exclusivity is granted for a drug product that contains an active moiety that has been previously approved, when the application contains reports of new clinical investigations (other than bioavailability studies) conducted or sponsored by the applicant that were essential to approval of the application, for example, for new indications, dosages, strengths or dosage forms of an existing drug.
An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature, and a proposed clinical trial protocol, among other things, to the FDA as part of an IND. Certain non-clinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue even after the IND is submitted.
An IND sponsor must submit the results of the pre-clinical tests, together with manufacturing information, analytical data, any available clinical data or literature, and a proposed clinical trial protocol, among other things, to the FDA as part of an IND. Certain non-clinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue even after the IND is submitted.
More than 30 foreign patent applications are pending that relate to the ARIKAYCE composition and/or its use in treating various pulmonary disorders, including NTM lung disease. Through our agreements with PARI, we have license rights to US and foreign patents and applications that cover the Lamira medical device through January 18, 2034.
More than 20 foreign patent applications are pending that relate to the ARIKAYCE composition and/or its use in treating various pulmonary disorders, including NTM lung disease. Through our agreements with PARI, we have license rights to US and foreign patents and applications that cover the Lamira medical device through January 18, 2034.
The NDA or BLA is a large submission that must include, among other things, the results of all preclinical, clinical and other testing and a compilation of data relating to the product's pharmacology, chemistry, manufacture, and controls. The application also includes representative samples, copies of the proposed product labeling, patent information, and a financial certification or disclosure statement.
The NDA or BLA is a large submission that must include, among other things, the results of all pre-clinical, clinical and other testing and a compilation of data relating to the product's pharmacology, chemistry, manufacture, and controls. The application also includes representative samples, copies of the proposed product labeling, patent information, and a financial certification or disclosure statement.
The agreement may also be terminated under certain other circumstances, including by either party due to a material uncured breach of the other party or the other party’s insolvency, the discontinue of specified dosages or changes in the regulatory landscape. Esteve’s supply obligations are based on rolling forecasts of our anticipated demand for brensocatib.
The agreement may also be terminated under certain other circumstances, including by either party due to a material uncured breach of the other party or the other party’s insolvency, the discontinue of specified dosages or changes in the regulatory landscape. Esteve’s supply obligations are based on rolling forecasts of our anticipated demand for BRINSUPRI.
Device manufacturers must also comply with FDA requirements regarding promotion, which require that promotion is truthful, not misleading, fairly balanced, and that all claims are substantiated, and prohibit the promotion of products for unapproved or “off-label” uses. Medical device manufacturers must demonstrate and maintain compliance with the FDA’s QSR.
Device manufacturers must also comply with FDA requirements regarding promotion, which require that promotion is truthful, not misleading, and that all claims are substantiated, and prohibit the promotion of products for unapproved or “off-label” uses. Medical device manufacturers must demonstrate and maintain compliance with the FDA’s QSR.
The product agreements specify, among other things, the term and pricing for Patheon Inc.’s supply obligations. Esteve Química, S.A. In September 2024, we entered into a commercial manufacturing and supply agreement with Esteve for the manufacture and supply of brensocatib's active pharmaceutical ingredient.
The product agreements specify, among other things, the term and pricing for Patheon Inc.’s supply obligations. Esteve Química, S.A. In September 2024, we entered into a commercial manufacturing and supply agreement with Esteve for the manufacture and supply of active pharmaceutical ingredient for brensocatib.
Neither the information in or that can be accessed through our website, nor the contents of the SEC's website, are incorporated by reference in this Annual Report on Form 10-K. Financial Information The financial information required under this Item 1 is incorporated herein by reference to Item 8 of this Annual Report on Form 10-K. 34
Neither the information in or that can be accessed through our website, nor the contents of the SEC's website, are incorporated by reference in this Annual Report on Form 10-K. Financial Information The financial information required under this Item 1 is incorporated herein by reference to Item 8 of this Annual Report on Form 10-K. 36
In December 2020, we commenced the post-marketing confirmatory clinical trial program for ARIKAYCE in patients with MAC lung disease consisting of the ARISE trial, an interventional study designed to validate cross-sectional and longitudinal characteristics of a PRO tool in MAC lung disease, and the ENCORE trial, designed to establish the clinical benefits and evaluate the safety of ARIKAYCE in patients with newly diagnosed or recurrent MAC lung infection who have not started antibiotics using the PRO tool validated in the ARISE trial.
In December 2020, we commenced the post-marketing confirmatory clinical trial program for ARIKAYCE in patients with MAC lung disease consisting of the ARISE trial, an interventional study designed to validate cross-sectional and longitudinal characteristics of a patient-reported outcome (PRO) tool in MAC lung disease, and the ENCORE trial, designed to establish the clinical benefits and evaluate the safety of ARIKAYCE in patients with newly diagnosed or recurrent MAC lung infection who have not started antibiotics using the PRO tool validated in the ARISE trial.
Manufacturing We do not have any in-house manufacturing capability other than for small-scale preclinical development programs and we depend completely on a small number of third-party manufacturers and suppliers for the manufacture of our product candidates for use in clinical trials.
Manufacturing We do not have any in-house manufacturing capability other than for small-scale pre-clinical development programs and we depend completely on a small number of third-party manufacturers and suppliers for the manufacture of our product candidates for use in clinical trials.
As one of the conditions for obtaining Medicaid and, if applicable, Medicare Part B coverage for our marketed pharmaceutical products, we will need to agree to pay a rebate to state Medicaid agencies that provide reimbursement for those products.
As one of the conditions for obtaining Medicaid and, if applicable, Medicare Part B or Part D coverage for our marketed pharmaceutical products, we will need to agree to pay a rebate to state Medicaid agencies that provide reimbursement for those products.
The FDA may, on its own initiative or at the request of an applicant, grant deferrals for submission of data or full or partial waivers. Unless otherwise required by regulation, and subject to an exception for certain oncology drugs, PREA does not apply to any drug for an indication for which orphan designation has been granted.
The FDA may, on its own initiative or at the request of an applicant, grant deferrals for submission of such assessments or full or partial waivers. Unless otherwise required by regulation, and subject to an exception for certain oncology drugs, PREA does not apply to any drug for an indication for which orphan designation has been granted.
The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will typically inspect the facility or the facilities at which the drug or biological product is manufactured.
The FDA is not bound by the recommendation of an advisory committee, but it generally has followed such recommendations. Before approving an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will typically inspect the facility or the facilities at which the drug or biological product is manufactured.
More than 50 patents have also been issued and are in force in other major foreign markets, e.g., Japan, China, Korea, Australia, and India, that relate to ARIKAYCE and/or methods of using ARIKAYCE for treating various pulmonary disorders, including NTM lung disease.
More than 350 patents have also been issued and are in force in other foreign markets, e.g., Japan, China, Korea, Australia, and India, that relate to ARIKAYCE and/or methods of using ARIKAYCE for treating various pulmonary disorders, including NTM lung disease.
Disclosure of Clinical Trial Information Under US and certain foreign laws intended to improve clinical trial transparency, sponsors of clinical trials may be required to register and disclose certain information about their clinical trials. This can include information related to the investigational drug, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial.
Disclosure of Clinical Trial Information Under US and certain foreign laws intended to improve clinical trial transparency, sponsors of clinical trials are required to register and disclose certain information about their clinical trials. This can include information related to the investigational drug, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial.
The MDR and its associated guidance documents and harmonized standards, govern, among other things, device design and development, preclinical and clinical or performance testing, premarket conformity assessment, registration and listing, manufacturing, labeling, storage, claims, sales and distribution, export and import and post-market surveillance, vigilance, and market surveillance.
The MDR and its associated guidance documents 31 and harmonized standards, govern, among other things, device design and development, pre-clinical and clinical or performance testing, premarket conformity assessment, registration and listing, manufacturing, labeling, storage, claims, sales and distribution, export and import and post-market surveillance, vigilance, and market surveillance.
Based on an analysis using information from external sources, including market research funded by us and third parties, and internal analyses and calculations, we estimate the potential patient populations in the US, the European 5 (comprised of France, Germany, Italy, Spain and the UK) and Japan are as follows: Potential Market Estimated Number of Patients with Diagnosed MAC Lung Disease Estimated Number of Patients with Refractory MAC Lung Disease United States 95,000-115,000 12,000-17,000 European 5 14,000 1,400 Japan 125,000-145,000 15,000-18,000 We are not aware of any other approved inhaled therapies specifically indicated for NTM lung disease in North America, Europe or Japan.
Based on an analysis using information from external sources, including market research funded by us and third parties, and internal analyses and calculations, we estimate the potential patient populations in the US, the European 5 and Japan are as follows: Potential Market Estimated Number of Patients with Diagnosed MAC Lung Disease Estimated Number of Patients with Refractory MAC Lung Disease United States 95,000-115,000 12,000-17,000 European 5 14,000 1,400 Japan 125,000-145,000 15,000-18,000 We are not aware of any other approved inhaled therapies specifically indicated for NTM lung disease in North America, Europe or Japan.
In January 2024, the FDA issued a final rule amending the QSR to align more closely with the international consensus standard for Quality Management Systems for medical devices used by many other regulatory authorities around the world, ISO 13485:2016. The revised regulation is referred to as the Quality Management System Regulation (QMSR) and becomes effective on January 2, 2026.
In January 2024, the FDA issued a final rule amending the QSR to align more closely with the international consensus standard for Quality Management Systems for medical devices used by many other regulatory authorities around the world, ISO 13485:2016. The revised regulation is referred to as the QMSR and became effective on February 2, 2026.
July 19, 2026), also include claims related to ARIKAYCE and its use in treating NTM lung disease. European Patent Nos. 2852391 and 4005576 each expires May 21, 2033 and include claims related ARIKAYCE together with a vibrating mesh nebulizer having certain properties.
July 19, 2026), also include claims related to ARIKAYCE and its use in treating NTM lung disease. European Patent Nos. 2852391, 4005576, and 4331675 each expire May 21, 2033 and include claims related ARIKAYCE together with a vibrating mesh nebulizer having certain properties.
Our first product, ARIKAYCE, is approved in the US as ARIKAYCE ® (amikacin liposome inhalation suspension), in Europe as ARIKAYCE Liposomal 590 mg Nebuliser Dispersion and in Japan as ARIKAYCE inhalation 590mg (amikacin sulfate inhalation drug product).
ARIKAYCE is approved in the US as ARIKAYCE (amikacin liposome inhalation suspension), in Europe as ARIKAYCE Liposomal 590 mg Nebuliser Dispersion and in Japan as ARIKAYCE inhalation 590mg (amikacin sulfate inhalation drug product).
The description below summarizes the current approval process in the US for our product and product candidates. Preclinical Studies Preclinical studies may include laboratory evaluation of product chemistry, formulation and toxicity, and pharmacology, as well as animal trials to assess the characteristics and potential safety and efficacy of the product.
The description below summarizes the current approval process in the US for our product and product candidates. Pre-clinical Studies Pre-clinical studies may include laboratory evaluation of product chemistry, formulation and toxicity, and pharmacology, as well as animal trials to assess the characteristics and potential safety and efficacy of the product.
We are not aware of any other approved inhaled therapies specifically indicated to treat MAC lung disease in Nor th America, Europe or Japan. We believe that ARIKAYCE has the potential to prove beneficial in other patients with refractory MAC.
We are not aware of any other approved inhaled therapies specifically indicated to treat MAC lung disease in North America, Europe or Japan. We believe that ARIKAYCE has the potential to prove beneficial in other patients with refractory MAC lung disease.
At present, we have received two registrations for the INSMED mark and one registration for the ARIKAYCE mark from the US Patent and Trademark Office (USPTO). We have also received notices of allowance or registrations in a number of countries abroad for the INSMED and ARIKAYCE marks, among others.
At present, we have received three registrations for the INSMED mark, one registration for the ARIKAYCE mark and one registration for the BRINSUPRI mark from the US Patent and Trademark Office (USPTO). We have also received notices of allowance or registrations in a number of countries abroad for the INSMED, ARIKAYCE and BRINSUPRI marks, among others.
The agreements may also be terminated under certain other circumstances, including by either party due to a material uncured breach of the other party or the other party’s insolvency. These early termination clauses may reduce the amounts due to the relevant parties.
The agreements may also be terminated under certain other circumstances, including by either party due to a material uncured breach of the other party or the other party’s insolvency. These early termination clauses may reduce the amounts due to the releva nt parties.
As a condition of approval, or after approval, the FDA also may require submission of a risk evaluation and mitigation strategy (REMS) or a REMS with elements to assure safe use to mitigate any identified or suspected serious risks.
As a condition of approval, or after approval, the FDA also may require submission, approval, and implementation of a risk evaluation and mitigation strategy (REMS), including a REMS with elements to assure safe use (ETASU) to mitigate any identified or suspected serious risks.
In January 2024, we entered into certain agreements with Patheon Inc., a wholly-owned subsidiary of Thermo Fisher, related to the manufacture and supply of brensocatib by Patheon Inc. for our anticipated long-term commercial needs. In addition, in September 2024, we entered into a commercial manufacturing and supply agreement with Esteve Química, S.A.
In January 2024, we entered into certain agreements with Patheon Inc., a wholly-owned subsidiary of Thermo Fisher, related to the manufacture and supply of commercial brensocatib products, including BRINSUPRI, by Patheon Inc. for our long-term commercial needs. In addition, in September 2024, we entered into a commercial manufacturing and supply agreement with Esteve Química, S.A.
Certain entities have expressed interest in studying other DPP1 inhibitors for the treatment of bronchiectasis and we are aware of at least two entities currently conducting clinical trials for the treatment of bronchiectasis with a DPP1 inhibitor. Products developed by certain of our competitors may potentially be used in combination with brensocatib, if approved.
Certain entities have expressed interest in studying other DPP1 inhibitors for the treatment of bronchiectasis and we are aware of several other entities currently conducting clinical trials for the treatment of bronchiectasis with a DPP1 inhibitor. Products developed by certain of our competitors may potentially be used in combination with brensocatib, if approved.
Ten patents have been granted by the European Patent Office (EPO) (European Patent Nos. 1909759, 1962805, 2823820, 2852391, 3067046, 3142643, 3466432, 3766501, 4005576 and 4122470) that relate to ARIKAYCE and its use in treating NTM lung disease, including those caused by MAC infections.
Ten patents are in force that have been granted by the European Patent Office (EPO) (European Patent Nos. 1909759, 1962805, 2852391, 3067046, 3142643, 3466432, 3766501, 4005576, 4122470, and 4331675) that relate to ARIKAYCE and its use in treating NTM lung disease, including those caused by MAC infections.
While there are currently no approved treatments for bronchiectasis, clinical studies in this disease state and specific endotypes (for instance, bronchiectasis with eosinophilic inflammation) have been initiated.
While there are currently no approved treatments for bronchiectasis, other than BRINSUPRI, clinical studies in this disease state and specific endotypes (for instance, bronchiectasis with eosinophilic inflammation) have been initiated.
ARIKAYCE • Following the announcement of positive topline results from the ARISE trial, in June 2024, we met and al igned with the FDA on the primary endpoint for the ENCORE trial.
ARIKAYCE • Following the announcement of positive topline results from the ARISE trial, in June 2024, we met and aligned with the FDA on the primary endpoint for the ENCORE trial.
To date, we have been unable to reach an acceptable agreement of a nationally reimbursed price with the Italian Medicines Agency; however, ARIKAYCE remains commercially available for physicians to prescribe in Italy under Class C, where we set the price and funding is agreed locally.
ARIKAYCE is reimbursed nationally in France, Belgium, the Netherlands, the UK and Ireland. To date, we have been unable to reach an acceptable agreement of a nationally reimbursed price with the Italian Medicines Agency; however, ARIKAYCE remains commercially available for physicians to prescribe in Italy under Class C, where we set the price and funding is agreed locally.
The conduct of the preclinical tests must comply with federal regulations and requirements including the FDA's good laboratory practice (GLP) regulations and the US Department of Agriculture's regulations implementing the Animal Welfare Act.
The conduct of the pre-clinical tests must comply with federal regulations and requirements including the FDA's good laboratory practice (GLP) regulations and the US Department of Agriculture's regulations implementing the Animal Welfare Act.
In Phase 1, short term (typically less than a few months) testing is conducted in a small group of subjects (typically 20-100), who may be patients with the target disease or condition or healthy volunteers, to evaluate its safety, determine a safe dosage range, and identify side effects.
In Phase 1, short term testing is conducted in a small group of 24 subjects (typically 20-100), who may be patients with the target disease or condition or healthy volunteers, to evaluate its safety, determine a safe dosage range, and identify side effects.
The aggregate investment to increase the long-term production capacity, including under these agreements, and related agreements or purchase orders with third parties for raw materials and fixed assets, is estimated to be approximately $116.0 million.
The aggregate investment to increase the long-term production capacity, including under these agreements, and related agreements or purchase orders with third parties for raw materials and fixed assets, is estimated to be approximately $127.7 million.
In September 2018, the FDA granted accelerated approval for ARIKAYCE under the Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD) for the treatment of refractory MAC lung disease as part of a combination antibacterial drug regimen for adult patients with limited or no alternative treatment options.
Accelerated Approval and Post-Marketing Confirmatory Clinical Trial In September 2018, the FDA granted accelerated approval for ARIKAYCE under the Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD) for the treatment of refractory MAC lung disease as part of a combination antibacterial drug regimen for adult patients with limited or no alternative treatment options.
The prevalence of NTM lung disease has increased over the past two decades, and we believe it is an emerging public hea lth concern worldwide.
The prevalence of NTM lung disease has increased over the past two decades, and we believe it is an emerging public health concern worldwide.
ARIKAYCE Patents Of the patents and applications related to ARIKAYCE, there are 13 in force issued US patents that cover the ARIKAYCE composition and its use in treating NTM that are listed in the FDA Orange Book.
ARIKAYCE (amikacin liposome inhalation suspension) Patents Of the patents and applications related to ARIKAYCE, there are 13 in force issued US patents that cover the ARIKAYCE composition and its use in treating NTM that are listed in the FDA Orange Book.
These patents and their expiration dates, based on filing dates, are as follows: 15 • US Patent No. 7,718,189 (expires June 6, 2025) • US Patent No. 8,226,975 (expires August 15, 2028) • US Patent No. 8,632,804 (expires December 5, 2026) • US Patent No. 8,679,532 (expires December 5, 2026) • US Patent No. 8,642,075 (expires December 5, 2026) • US Patent No. 9,566,234 (expires January 18, 2034) • US Patent No. 9,895,385 (expires May 15, 2035) • US Patent No. 10,251,900 (expires May 15, 2035) • US Patent No. 10,751,355 (expires May 15, 2035) • US Patent No. 11,446,318 (expires May 15, 2035) • US Patent No. 12,016,873 (expires May 15, 2035) • US Patent No. 12,168,021 (expires May 15, 2035) • US Patent No. 12,168,022 (expires May 15, 2035) In addition, we own four pending US patent applications that cover the ARIKAYCE composition and/or its use in treating NTM lung disease, including those caused by MAC infections.
These patents and their expiration dates are as follows: • US Patent No. 8,226,975 (expires August 15, 2028) • US Patent No. 8,632,804 (expires December 5, 2026) • US Patent No. 8,679,532 (expires December 5, 2026) • US Patent No. 8,642,075 (expires December 5, 2026) • US Patent No. 9,566,234 (expires January 18, 2034) • US Patent No. 9,895,385 (expires May 15, 2035) • US Patent No. 10,251,900 (expires May 15, 2035) 16 • US Patent No. 10,751,355 (expires May 15, 2035) • US Patent No. 11,446,318 (expires May 15, 2035) • US Patent No. 12,016,873 (expires May 15, 2035) • US Patent No. 12,168,021 (expires May 15, 2035) • US Patent No. 12,168,022 (expires May 15, 2035) • US Patent No. 12,377,114 (expires May 15, 2035) In addition, we own four pending US patent applications that cover the ARIKAYCE composition and/or its use in treating NTM lung disease, including those caused by MAC infections.
If the PMOA is unclear or in dispute, a sponsor may file a Request for 26 Designation with the FDA’s Office of Combination Products (OCP), which will render a determination and assign a lead Center. OCP generally assigns jurisdiction based on PMOA.
If the PMOA is unclear or in dispute, a sponsor may file a Request for Designation with the FDA’s Office of Combination Products (OCP), which will render a determination and assign a lead Center based on the product's PMOA.
The aggregate investment to increase our long-term production capacity, including under the Patheon agreements and related agreements or purchase orders with third parties for raw materials and fixed assets, is estimated to be approximately $116.0 million. Cystic Fibrosis Foundation Therapeutics, Inc. In 2004 and 2009, we entered into research funding agreements with Cystic Fibrosis Foundation Therapeutics, Inc.
The aggregate investment to increase our long-term production capacity, including under the Patheon agreements and related agreements or purchase orders with third parties for raw materials and fixed assets, is estimated to be approximatel y $127.7 million. Cystic Fibrosis Foundation Therapeutics, Inc. In 2004 and 2009, we entered into research funding agreements with Cystic Fibrosis Foundation Therapeutics, Inc.
We own pending patent applications that relate to methods for using treprostinil prodrugs and formulations comprising the same, including TPIP in treating patients with PAH and other diseases, as well as methods for manufacturing such treprostinil prodrugs and formulations.
We own pending patent applications that relate to treprostinil prodrug formulations, methods for using treprostinil prodrugs and formulations comprising the same, including the use of TPIP in treating patients with PAH, PH-ILD and other diseases, as well as methods for manufacturing such treprostinil prodrugs and formulations.
Competition The biotechnology and pharmaceutical industries are highly competitive. We face potential competitors from many different areas including commercial pharmaceutical, biotechnology and device companies, academic institutions and scientists, other smaller or earlier stage companies and non-profit organizations developing anti-infective drugs and drugs for respiratory, inflammatory, immunology, oncology, and rare diseases.
We face potential competitors from many different areas including commercial pharmaceutical, biotechnology and device companies, academic institutions and scientists, other smaller or earlier stage companies and non-profit organizations developing anti-infective drugs and drugs for respiratory, inflammatory, immunology, oncology, and rare diseases.
Patients in the ARIKAYCE arm also achieved nominally statistically significantly higher culture conversion rates at Month 7 versus patients in the comparator arm (78.8% vs. 47.1%, p=0.0010), and culture conversion was faster and more likely to persist through Month 7 for the ARIKAYCE arm.
Patients in the ARIKAYCE arm also achieved nominally statistically significantly higher culture conversion rates at Month 7 versus patients in the comparator arm (78.8% vs. 47.1%, p=0.0010), and culture conversion was faster and more likely to persist through Month 7 for the ARIKAYCE arm, suggesting that ARIKAYCE-treated patients are more likely to remain negative.
Intellectual Property We own or license rights to more than 850 issued patents and pending patent applications in the US and in foreign countries, including more than 300 issued patents and pending patent applications related to ARIKAYCE.
Intellectual Property We own or license rights to more than 1,400 issued patents and pending patent applications in the US and in foreign countries, including more than 400 issued patents and pending patent applications related to ARIKAYCE.
The FDA sets a goal date by which the FDA expects to issue either an approval letter or a complete response letter, unless the review period is adjusted by mutual agreement between the FDA and the applicant or as a result of the applicant submitting a major amendment.
The FDA sets a goal date by which the FDA expects to issue an action letter, unless the review period is adjusted by mutual agreement between the FDA and the applicant or as a result of the applicant submitting a major amendment.
Further post-approval requirements are discussed below. 23 Expedited Review and Approval of Eligible Drugs Under the FDA's accelerated approval program, the FDA may approve certain drugs for serious or life-threatening conditions on the basis of a surrogate or intermediate endpoint that is reasonably likely to predict clinical benefit, which can substantially reduce time to approval.
Expedited Review and Approval of Eligible Drugs Under the FDA's accelerated approval program, the FDA may approve certain drugs for serious or life-threatening conditions on the basis of a surrogate or intermediate endpoint that is reasonably likely to predict clinical benefit, which can substantially reduce time to approval.
The FDA has 60 days from its receipt of an NDA or BLA to determine whether the application is accepted for filing based on the FDA's threshold determination that it is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins a substantive review.
The FDA has 60 days from its receipt of an NDA or BLA to determine to accept the application for filing or issue a refuse to file determination based on the FDA's threshold determination of whether the application is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins a substantive review.
NDAs are reviewed by personnel within the Center for Drug Evaluation and Research, while device applications, premarket notifications, and de novo authorization requests are reviewed by the Center for Devices and Radiological Health.
NDAs are reviewed by personnel within the Center for Drug Evaluation and Research, while device PMAs, premarket notifications, and de novo classification requests are reviewed by the Center for Devices and Radiological Health.
Combination Products A combination product is a product comprising two or more regulated components (e.g., a drug and device) that are combined into a single product, co-packaged, or sold separately but intended for co-administration, as evidenced by the labeling for the products.
Combination Products A combination product is a product comprising two or more regulated components (e.g., a drug and device) that are combined into a single product, co-packaged, or sold separately but intended only for use with each other, as evidenced by the labeling for the products.
Reimbursement Outside of the US In October 2020, the EC granted marketing authorization for ARIKAYCE for the treatment of NTM lung infections caused by MAC in adults with limited treatment options who do not have CF. ARIKAYCE can now be prescribed for appropriate patients across the European Union (EU) countries as well as in the United Kingdom (UK).
Regulatory Approval Outside of the US In October 2020, the EC granted marketing authorization for ARIKAYCE for the treatment of NTM lung infections caused by MAC in adults with limited treatment options who do not have CF. ARIKAYCE can now be prescribed for patients across the EU countries as well as in the UK.
Combination products, such as drug/device combinations, are typically reviewed through a marketing submission that corresponds to the constituent part which provides the product's primary mode of action (PMOA), i.e., is the single mode of action that provides the most important therapeutic action of the combination product.
Combination products, such as drug/device combinations, are typically reviewed through a marketing submission that corresponds to the constituent part which provides the product's primary mode of action (PMOA), i.e., is the single mode of action that makes the greatest contribution to the overall therapeutic effect of the combination product.
Those requirements include, for example, establishment registration and device listing; compliance with the requirements of the Quality System Regulation (QSR); medical device reporting regulations; correction and removal reporting regulations; compliance with requirements for Unique Device Identification; and post-market surveillance activities and obligations.
Those requirements include, for example, establishment registration and device listing; compliance with the requirements of the Quality Management System Regulation (QMSR); medical device reporting regulations; correction and removal reporting regulations; compliance with requirements for Unique Device Identification; and, in certain cases, post-market surveillance activities and obligations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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We depend heavily on our management team and our principal clinical and commercial personnel, the loss of whose services might significantly delay or prevent the achievement of our research, development or commercialization objectives.
We depend heavily on our management team and our principal commercial and clinical personnel, the loss of whose services might significantly delay or prevent the achievement of our research, development or commercialization objectives.
Our competitors may also be able to circumvent our owned or licensed patents by developing similar or alternative technologies or products in a non-infringing manner.
Our competitors may also be able to circumvent our owned or in-licensed patents by developing similar or alternative technologies or products in a non-infringing manner.
We do not know whether additional financing will be available when needed, or, if available, whether the terms will be favorable. If adequate funds are not available to us when needed, we may be forced to delay, restrict or eliminate all or a portion of our development programs or commercialization efforts.
We do not know whether additional financing will be available when needed, or, if available, whether the terms will be favorable to us. If adequate funds are not available to us when needed, we may be forced to delay, restrict or eliminate all or a portion of our development programs or commercialization efforts.
In the future, we may issue additional equity securities for capital raising purposes, in connection with hiring or retaining employees, to fund acquisitions, or for other business purposes. We have previously funded, and expect to continue to fund, acquisitions using shares of our common stock as consideration.
In the future, we may issue additional equity securities for capital raising purposes, in connection with hiring or retaining employees, to fund or as consideration for acquisitions, or for other business purposes. We have previously funded, and expect to continue to fund, acquisitions using shares of our common stock as consideration.
If we experience delays in our clinical trials or other testing or the results of these trials or tests are not positive or are only modestly positive, including with respect to safety, we may: • Experience increased product development costs; • Be delayed in obtaining, or be unable to obtain, regulatory approval for one or more of our product candidates; • Obtain approval for indications or patient populations that are not as broad as intended or entirely different than those indications for which we sought approval or with labeling with boxed warnings or other warnings or contraindications; • Need to change the way the product is administered; • Be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements; • Have regulatory authorities withdraw, or suspend, their approval of the product or impose risk mitigation strategies such as restrictions on distribution or other REMS; • Face a shortened patent protection period during which we may have the exclusive right to commercialize our products; • Have competitors that are able to bring similar products to market before us; • Be sued for alleged injuries caused to patients using our products; or • Suffer reputational damage.
If we experience delays in our clinical trials or other testing or the results of these trials or tests are not positive or are only modestly positive, including with respect to safety, we may: • Experience increased product development costs; • Be delayed in obtaining, or be unable to obtain, regulatory approval for one or more of our product candidates; • Obtain approval for indications or patient populations that are not as broad as intended or entirely different than those indications for which we sought approval or with labeling with boxed warnings or other warnings or contraindications; • Need to change the way the product is administered; • Be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements; 47 • Have regulatory authorities withdraw, or suspend, their approval of the product or impose risk mitigation strategies such as a REMS or other restrictions on distribution; • Face a shortened patent protection period during which we may have the exclusive right to commercialize our products; • Have competitors that are able to bring similar products to market before us; • Be sued for alleged injuries caused to patients using our products; or • Suffer reputational damage.
Additionally, patents issued to us or our licensors may be challenged, narrowed, invalidated, held to be unenforceable or circumvented through litigation, either in district court, the US international trade commission (ITC) or US patent office (USPTO), or in analogous foreign courts and patent offices, which could limit our ability to stop competitors from marketing similar products or reduce the term of patent protection for ARIKAYCE or our product candidates.
Additionally, patents issued to us or our licensors may be challenged, narrowed, invalidated, held to be unenforceable or circumvented through litigation, either in district court, the US international trade commission (ITC) or US patent office (USPTO), or in analogous foreign courts and patent offices, which could limit our ability to stop competitors from marketing similar products or reduce the term of patent protection for ARIKAYCE, BRINSUPRI, or our product candidates.
The future occurrence of a potential indicator of impairment could include matters such as (i) a decrease in expected net earnings, (ii) adverse equity market conditions, (iii) a decline in current market multiples, (iv) a decline in our common stock price, (v) a significant adverse change in legal factors or the general business climate, and (vi) an adverse action or assessment by a regulator.
The future occurrence of a potential indicator of impairment could include matters such as (i) a decrease in expected net earnings, (ii) adverse equity market conditions, (iii) a decline in current market multiples, (iv) a decline in our common stock price, (v) a significant adverse change in legal factors or the general business climate, and (vi) an adverse action 64 or assessment by a regulator.
If we ultimately receive approval for ARIKAYCE or any of our product candidates in jurisdictions other than the US, Europe, and Japan, we expect to be subject to similar ongoing regulatory oversight by the relevant foreign regulatory authorities, including the requirement to negotiate with national governments and other counterparties on pricing and reimbursement prices for each new jurisdiction.
If we ultimately receive approval for ARIKAYCE, BRINSUPRI or any of our product candidates in jurisdictions other than the US, Europe, or Japan, we expect to be subject to similar ongoing regulatory oversight by the relevant foreign regulatory authorities, including the requirement to negotiate with national governments and other counterparties on pricing and reimbursement prices for each new jurisdiction.
The degree to which a limited number of customers make up a significant portion of our gross product revenue may change as we continue to commercialize ARIKAYCE and, if approved, our product candidates in additional markets. There can be no guarantee that we will be able to sustain our accounts receivable or gross sales levels from our key customers.
The degree to which a limited number of customers make up a significant portion of our gross product revenue may change as we continue to commercialize ARIKAYCE, BRINSUPRI, and, if approved, our product candidates in additional markets. There can be no guarantee that we will be able to sustain our accounts receivable or gross sales levels from our key customers.
If we are not in compliance with the FCPA and other anti-corruption laws or Trade Control laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and prospects and the value of our common stock.
If we are not in compliance with the FCPA and other anti-corruption laws or Trade Control laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which may have an adverse impact on our business, financial condition, results of operations and prospects and the value of our common stock.
The ability of the FDA to review and approve new products, provide feedback on clinical trials and development programs, meet with sponsors and otherwise review regulatory submissions can be affected by a variety of factors, including government budget and funding levels; ability to hire and retain key personnel and accept the payment of user fees; and statutory, regulatory, and policy changes, among other factors.
The ability of the FDA to review and approve new products, provide feedback on clinical trials and development programs, meet with sponsors and otherwise review regulatory submissions can be affected by a variety of factors, including government budget and funding levels; ability to hire and retain personnel and accept the payment of user fees; and statutory, regulatory, and policy changes, among other factors.
ARIKAYCE was approved in the US for the treatment of MAC lung disease as part of a combination 36 antibacterial drug regimen for adult patients with limited or no alternative treatment options in a refractory setting, as defined by patients who do not achieve negative sputum cultures after a minimum of six consecutive months of a multidrug background regimen therapy.
ARIKAYCE was approved in the US for the treatment of MAC lung disease as part of a combination antibacterial drug regimen for adult patients with limited or no alternative treatment options in a refractory setting, as defined by patients who do not achieve negative sputum cultures after a minimum of six consecutive months of a multidrug background regimen therapy.
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain and involves complex legal, technical, scientific and factual questions, and our success depends in large part on our ability to protect our 53 proprietary technology and to obtain and maintain patent protection for our products, prevent third parties from infringing our patents, both domestically and internationally.
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain and involves complex legal, technical, scientific and factual questions, and our success depends in large part on our ability to protect our proprietary technology and to obtain and maintain patent protection for our products, prevent third parties from infringing our patents, both domestically and internationally.
The regulatory review committees and advisory groups in the US, Europe and elsewhere, and any new guidelines they promulgate, may lengthen the regulatory review process, require us to perform additional studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our product candidates or lead to significant post-approval limitations or restrictions.
The regulatory review committees and advisory groups in the US, Europe, Japan, and elsewhere, and any new guidelines they promulgate, may lengthen the regulatory review process, require us to perform additional studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our product candidates or lead to significant post-approval limitations or restrictions.
Resolving such delays could force us or third parties to incur significant costs, limit our allowed activities or the allowed activities of third parties, diminish any competitive advantages that we or our third parties may attain or adversely affect our ability to receive royalties, any of which could materially adversely affect our business, financial condition, results of operations and prospects and the value of our common stock.
Resolving such delays may force us or third parties to incur significant costs, limit our allowed activities or the allowed activities of third parties, diminish any competitive advantages that we or our third parties may attain or adversely affect our ability to receive royalties, any of which may materially adversely affect our business, financial condition, results of operations and prospects and the value of our common stock.
In either circumstance, even if we obtain regulatory approval, we may be unable to commercialize the product on a scale sufficient to generate significant revenue from such product candidates, which could have a material adverse effect on our business, financial condition, results of operations and prospects and the value of our common stock.
In either circumstance, even if we obtain regulatory approval, we may be unable to commercialize the product on a scale sufficient to generate significant revenue from such product candidates, which may have a material adverse effect on our business, financial condition, results of operations and prospects and the value of our common stock.
In that case, we will be reliant on third parties to successfully commercialize ARIKAYCE and will have less control over commercialization efforts than if we handled commercialization with our own sales force. However, we may not be able to enter into arrangements with third parties to sell ARIKAYCE on favorable terms or at all.
In that case, we will be reliant on third parties to successfully commercialize ARIKAYCE and/or BRINSUPRI and will have less control over commercialization efforts than if we handled commercialization with our own sales force. However, we may not be able to enter into arrangements with third parties to sell ARIKAYCE and/or BRINSUPRI on favorable terms or at all.
Adverse side effects may also be experienced by patients as a result of the process for administering the therapy or related procedures. 44 There have been several significant adverse side effects in gene therapy treatments in the past, including reported cases of leukemia, immune-mediated responses, and death seen in other trials.
Adverse side effects may also be experienced by patients as a result of the process for administering the therapy or related procedures. There have been several significant adverse side effects in gene therapy treatments in the past, including reported cases of leukemia, immune-mediated responses, and death seen in other trials.
We expect that competing successfully will depend on, among other things, the relative speed with which we can develop products, complete the clinical testing and regulatory approval processes and supply commercial quantities of the product to the market, as well as product efficacy, safety, reliability, availability, timing and scope of regulatory approval and price.
We expect that competing successfully will depend on, among other things, the relative speed with which we can develop products, complete the clinical testing and regulatory approval processes and supply commercial quantities of the product to the market, as well as product efficacy, safety, reliability, availability, timing and scope of regulatory approval and 55 price.
We have invested and continue to invest significant efforts and financial resources in the commercialization of ARIKAYCE, and our ability to continue to generate revenue from ARIKAYCE will depend heavily on successfully commercializing and obtaining full regulatory approval for ARIKAYCE from the FDA by conducting an appropriate confirmatory post-marketing study.
We have invested and continue to invest significant efforts and financial resources in the commercialization of ARIKAYCE and BRINSUPRI. Our ability to continue to generate revenue from ARIKAYCE will depend heavily on successfully commercializing and obtaining full regulatory approval for ARIKAYCE from the FDA by conducting an appropriate confirmatory post-marketing study.
Although we seek to structure our business arrangements in compliance with all applicable requirements, these laws are broadly written, and it is often difficult to determine precisely how the law will be applied in specific circumstances. Accordingly, it is possible that our practices may be challenged under these laws.
Although we seek 60 to structure our business arrangements in compliance with all applicable requirements, these laws are broadly written, and it is often difficult to determine precisely how the law will be applied in specific circumstances. Accordingly, it is possible that our practices may be challenged under these laws.
We may need to raise additional funds to continue our operations, and any failure to obtain capital when needed on acceptable terms, or at all, could force us to delay, reduce, or eliminate our development programs, commercialization efforts or other operations. Our operations have consumed substantial amounts of cash since our inception.
We may need to raise additional funds to continue our operations, and any failure to obtain capital when needed on acceptable terms, or at all, may force us to delay, reduce, or eliminate our development programs, commercialization efforts or other operations. Our operations have consumed substantial amounts of cash since our inception.
In addition, such shareholder suits could divert the time and attention of management from our business. Certain provisions of Virginia law, our articles of incorporation and amended and restated bylaws and arrangements between us and our employees could hamper a third party’s acquisition of us or discourage a third party from attempting to acquire control of us.
In addition, such shareholder suits could divert the time and attention of management from our business. Certain provisions of Virginia law, our articles of incorporation and amended and restated bylaws and arrangements between us and our employees may hamper a third party’s acquisition of us or discourage a third party from attempting to acquire control of us.
Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available, may be interpreted differently if additional data are disclosed, and are subject to audit and verification procedures that could result in material changes in the final data.
Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available, may be interpreted differently if additional data are disclosed, and are subject to audit and verification procedures that may result in material changes in the final data.
If additional results from our clinical trials are not consistent with this topline data or other previously released data or are not viewed favorably, our ability to obtain approval for and commercialize our approved drug and drug candidates, our business, operating results, prospects, or financial condition may be harmed and our stock price may decrease.
If additional results from our clinical trials are not consistent with topline data or other previously released data or are not viewed favorably, our ability to obtain approval for and commercialize our approved drug and drug candidates, our business, operating results, prospects, or financial condition may be harmed and our stock price may decrease.
In order to develop a product successfully, we must, among other things: • Identify potential product candidates; • Submit for and receive regulatory approval to perform clinical trials; • Design and conduct appropriate preclinical and clinical trials, including confirmatory clinical trials, according to good laboratory practices and good clinical practices and disease-specific expectations of the FDA and other regulatory bodies; • Select and recruit clinical investigators and subjects for our clinical trials; • Obtain and correctly interpret data establishing adequate safety of our product candidates and demonstrating with statistical significance that our product candidates are effective for their proposed indications, as indicated by satisfaction of pre-established endpoints; • Submit for and receive regulatory approvals for marketing; and • Manufacture the product candidates and device constituent parts according to cGMP and other applicable standards and regulations.
In order to develop a product successfully, we must, among other things: • Identify potential product candidates; • Submit for and receive regulatory approval to perform clinical trials; 45 • Design and conduct appropriate pre-clinical and clinical trials, including confirmatory clinical trials, according to good laboratory practices and good clinical practices and disease-specific expectations of the FDA and other regulatory bodies; • Select and recruit clinical investigators and subjects for our clinical trials; • Obtain and correctly interpret data establishing adequate safety of our product candidates and demonstrating with statistical significance that our product candidates are effective for their proposed indications, as indicated by satisfaction of pre-established endpoints; • Submit for and receive regulatory approvals for marketing; and • Manufacture the product candidates and device constituent parts according to cGMP and other applicable standards and regulations.
Our efforts to educate physicians, patients, third-party payors and others in the healthcare community on the benefits of ARIKAYCE have required and will continue to require significant resources, which may be greater than those required to commercialize more established technologies and these efforts may never be successful.
Our efforts to educate physicians, patients, third-party payors and others in the healthcare community on the benefits of ARIKAYCE and BRINSUPRI have required and will continue to require significant resources, which may be greater than those required to commercialize more established technologies and these efforts may never be successful.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our research and development program and manufacturing activities for ARIKAYCE and our product candidates involve the controlled use of hazardous materials and chemicals.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our research and development program and manufacturing activities for ARIKAYCE, BRINSUPRI, and our product candidates involve the controlled use of hazardous materials and chemicals.
These manufacturers and their facilities will be subject to periodic review and inspections by the FDA and other regulatory authorities following regulatory approval of our products, as with ARIKAYCE. For instance, to monitor compliance with applicable regulations, the FDA routinely conducts inspections of facilities and may identify potential deficiencies.
These manufacturers and their facilities will be subject to periodic review and inspections by the FDA and other regulatory authorities following regulatory approval of our products, as with ARIKAYCE and BRINSUPRI. For instance, to monitor compliance with applicable regulations, the FDA routinely conducts inspections of facilities and may identify potential deficiencies.
Acquisitions involve a number of operational risks, including: • Failure to achieve expected synergies; • The possibility that our acquired technologies, products and product candidates may not be commercially successful; • Difficulty and expense of assimilating the operations, technology and personnel of any acquired business; • The inability to retain the management, key personnel and other employees of any acquired business; • The inability to maintain any acquired company’s relationship with key third parties, such as alliance partners; • Exposure to legal claims or other liabilities for activities of any acquired business prior to acquisition; • Diversion of our management’s attention from our core business; and • Potential impairment of intangible assets, adversely affecting our reported results of operations and financial condition.
Acquisitions involve a number of operational risks, including: • Failure to achieve expected synergies; • The possibility that our acquired technologies, products and product candidates may not be commercially successful; • Difficulty and expense of assimilating the operations, technology and personnel of any acquired business; • The inability to retain the management, key personnel and other employees of any acquired business; • The inability to maintain any acquired company’s relationship with key third parties, such as alliance partners; • Exposure to legal claims or other liabilities for activities of or related to any acquired business or asset prior to acquisition; • Diversion of our management’s attention from our core business; and • Potential impairment of intangible assets, adversely affecting our reported results of operations and financial condition.
If we make one or more significant acquisitions or enter into a significant collaboration in which the consideration includes cash, we may be required to use a substantial portion of our available cash and/or need to raise additional capital, which could adversely affect our financial condition.
If we make one or more significant acquisitions or enter into a significant collaboration in which the consideration includes cash, we may be required to use a substantial portion of our available cash and/or need to raise additional capital, which may adversely affect our financial condition.
We may not be able to enforce our intellectual property rights throughout the world, which could harm our business. The legal systems of some foreign countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to life sciences.
We may not be able to enforce our intellectual property rights throughout the world, which may harm our business. The legal systems of some foreign countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to life sciences.
Any proceedings regarding our intellectual property rights are likely to be time consuming and may divert management attention from operation of our business, and could have a material adverse effect on our business, financial condition, results of operations and prospects and the value of our common stock.
Any proceedings regarding our intellectual property rights are likely to be time consuming and may divert management attention from operation of our business, and may have a material adverse effect on our business, financial condition, results of operations and prospects and the value of our common stock.
For example, under our license agreement with AstraZeneca, AstraZeneca retains a right of first negotiation pursuant to which it may exclusively negotiate with us before we can negotiate with a third party regarding any transaction to develop or commercialize brensocatib, subject to certain exceptions.
For example, under our license agreement with AstraZeneca, AstraZeneca retains a right of first negotiation pursuant to which it may exclusively negotiate with us before we can negotiate with a third party 59 regarding any transaction to develop or commercialize brensocatib, subject to certain exceptions.
For example, we do not own facilities for clinical-scale or commercial manufacturing of our product candidates, and we expect that our future supply requirements for brensocatib and TPIP will be manufactured by CMOs. We currently rely on Resilience and Patheon to provide our clinical and commercial supply of ARIKAYCE.
For example, we do not own facilities for clinical-scale or commercial manufacturing of our product candidates, and we expect that our future supply requirements for TPIP will be manufactured by CMOs. We currently rely on Resilience and Patheon to provide our clinical and commercial supply of ARIKAYCE.
We also could incur significant costs as a result of civil or criminal fines and penalties. In addition, we may incur substantial costs to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts.
We also may incur significant costs as a result of civil or criminal fines and penalties. In addition, we may incur substantial costs to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts.
The decisions of such governmental agencies could affect our ability to sell our products profitably. We continue to have discussions with third-party payors regarding our price for ARIKAYCE, and our pricing may meet resistance from them and the public generally.
The decisions of such governmental agencies could affect our ability to sell our products profitably. We continue to have discussions with third-party payors regarding our price for ARIKAYCE and BRINSUPRI, and our pricing may meet resistance from them and the public generally.
As a result, the preliminary or topline results that we report may differ from future results of the same trials, or different conclusions or considerations may qualify such results, once additional data have been disclosed and/or are received and fully evaluated.
As a result, the preliminary or topline results that we report may differ from future results of the same trials, or different conclusions or considerations may qualify such results, 46 once additional data have been disclosed and/or are received and fully evaluated.
We may face similar challenges to gaining regulatory approval and sufficient reimbursement and pricing due to government healthcare reform in the EU, Japan and other jurisdictions where ARIKAYCE or any of our other product candidates are approved.
We may face similar challenges to gaining regulatory approval and sufficient reimbursement and pricing due to government healthcare reform in the EU, Japan and other jurisdictions where ARIKAYCE, BRINSUPRI, or any of our product candidates are approved.
We also may face lower priced generic competitors if third-party payors encourage use of generic or lower-priced versions of our product or if competing products are imported into the US or other countries where we may sell ARIKAYCE.
We also may face lower priced generic competitors if third-party payors encourage use of generic or lower-priced versions of our product or if competing products are imported into the US or other countries where we may sell ARIKAYCE or BRINSUPRI.
In these countries, patents may provide limited or no benefit. This legal environment could make it 54 difficult for us to stop the infringement of our patents or in-licensed patents or the misappropriation of our other intellectual property rights.
In these countries, patents may provide limited or no benefit. This legal environment could make it difficult for us to stop the infringement of our patents or in-licensed patents or the misappropriation of our other intellectual property rights.
These agreements impose a number of obligations on us and our business, including restrictions on our ability to freely develop or commercialize our product candidates and requirements to make milestone and royalty payments to our counterparties upon certain events.
These agreements impose a number of obligations on us and our business, including restrictions on our ability to freely develop or commercialize our products and product candidates and requirements to make milestone and royalty payments to our counterparties upon certain events.
In order to continue to commercialize ARIKAYCE, we must continue to establish and maintain marketing, market access, sales and distribution capabilities on our own or make arrangements with third parties for its marketing, sale and distribution.
In order to continue to commercialize ARIKAYCE and BRINSUPRI, we must continue to establish and maintain marketing, market access, sales and distribution capabilities on our own or make arrangements with third parties for its marketing, sale and distribution.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, and our efforts to protect our intellectual property rights in such countries may be inadequate.
Proceedings to enforce our patent rights in foreign jurisdictions may result in substantial costs and divert our efforts and attention from other aspects of our business, and our efforts to protect our intellectual property rights in such countries may be inadequate.
We currently rely, and expect to continue to rely, on third parties for significant research, analytical services, pre-clinical development, clinical development and manufacturing of our product candidates and commercial scale manufacturing of ARIKAYCE and Lamira.
We currently rely, and expect to continue to rely, on third parties for significant research, analytical services, pre-clinical development, clinical development and manufacturing of our product candidates and commercial scale manufacturing of ARIKAYCE, Lamira, and BRINSUPRI.
In the event PARI cannot provide us with sufficient quantities of the 47 nebulizer, replication of the optimized device by another party would likely require considerable time and additional regulatory approval.
In the event PARI cannot provide us with sufficient quantities of the nebulizer, replication of the optimized device by another party would likely require considerable time and additional regulatory approval.
Compounds, products or 51 processes that we develop or that are developed on our behalf may become obsolete before we recover any expenses incurred in connection with their development.
Compounds, products or processes that we develop or that are developed on our behalf may become obsolete before we recover any expenses incurred in connection with their development.
Regardless of merit or eventual outcome, liability claims may result in: • Decreased demand for ARIKAYCE and any other products that we may commercialize, and a corresponding loss of revenue; • Substantial monetary awards to patients or trial participants; • Significant time and costs to defend the related litigation; 49 • Withdrawal or reduced enrollment of clinical trial participants; and • Reputational harm and significant negative media attention.
Regardless of merit or eventual outcome, liability claims may result in: • Decreased demand for ARIKAYCE, BRINSUPRI, and any other products that we may commercialize, and a corresponding loss of revenue; • Substantial monetary awards to patients or trial participants; • Significant time and costs to defend the related litigation; • Withdrawal or reduced enrollment of clinical trial participants; and • Reputational harm and significant negative media attention.
We may seek regulatory approval in territories outside the US and Europe, which may have their own regulatory authorities along with frequently changing requirements or guidelines.
We may seek regulatory approval in territories outside the US, Europe, and Japan, which may have their own regulatory authorities along with frequently changing requirements or guidelines.
Going forward, we may not be able to provide data sufficient to gain positive coverage and reimbursement determinations or we might need to conduct post-marketing studies in order to demonstrate the cost-effectiveness of ARIKAYCE to such payors’ satisfaction. Such studies might require us to commit a significant amount of management time and financial and other resources.
Going forward, we may not be able to provide data that are sufficient to gain positive coverage and reimbursement determinations or we might need to conduct post-marketing studies in order to demonstrate the cost-effectiveness of ARIKAYCE to such payors’ satisfaction. Such studies might require us to commit a significant amount of management time and financial and other resources.
The successful assertion of one or more large claims against us that exceed or are not covered by our insurance coverage or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, financial condition, results of operations and prospects and the value of our common stock.
The successful assertion of one or more large claims against us that exceed or are not covered by our insurance coverage or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, may have a material adverse effect on our business, financial condition, results of operations and prospects and the value of our common stock.
Our existing patents and any future patents we obtain may not be sufficiently broad to prevent others from using our technologies or from developing competing products and technologies.
Our existing patents and any future patents we obtain may 57 not be sufficiently broad to prevent others from using our technologies or from developing competing products and technologies.
These conditions include but are not limited to inflation, rising interest rates, limited availability of financing, energy availability and costs, the negative impacts caused by public health crises, negative impacts resulting from the military conflict between Russia and the Ukraine or the ongoing conflict in the Middle East, relations between the US and China, and the effects of governmental initiatives to manage economic conditions.
These conditions include but are not limited to inflation, rising interest rates, limited availability of financing, energy availability and costs, the negative impacts caused by public health crises, negative impacts resulting from the military conflict between Russia and Ukraine or the instability in the Middle East, relations between the US and China, and the effects of governmental initiatives to manage economic conditions.
We expect changes in the Medicare program and state Medicaid programs, as well as managed care organizations and other third-party payors, to continue to put pressure on pharmaceutical product pricing. One significant example of recent legislative action is the IRA, which was signed into law on August 16, 2022.
We expect changes in the Medicare program and state Medicaid programs, as well as managed care organizations and other third-party payors, to continue to put pressure on pharmaceutical product pricing. One significant example of applicable legislative action is the IRA, which was signed into law on August 16, 2022.
As with many innovations, AI presents risks and challenges that could undermine or slow its adoption, and therefore harm our business. Developing, testing and deploying AI systems may also increase our operating costs due to the nature of the computing costs involved in such systems, which could adversely affect our business, financial condition and results of operation.
As with many innovations, AI presents risks and challenges that could undermine or slow its adoption, and therefore harm our business. Developing, testing and deploying AI systems may also increase our operating costs due to the nature of the computing costs involved in such systems, which could adversely affect our business, financial condition and results of operations.
If a competitor obtains approval of the same drug for the same indication before us, and the FDA grants such orphan drug exclusivity, we would be prohibited from obtaining approval for our product for seven years (or longer if the seven-year exclusivity period is extended for a QIDP or due to pediatric exclusivity), unless our product can be shown to be clinically superior.
If a competitor obtains approval of the same drug for the same indication before we obtain approval, and the FDA grants such orphan drug exclusivity, we would be prohibited from obtaining approval for our product for seven years (or longer if the seven-year exclusivity period is extended for a QIDP or due to pediatric exclusivity), unless our product can be shown to be clinically superior.
Furthermore, there is the potential risk of delayed adverse events following exposure to gene therapy products due to persistent biological activity of the genetic material or other components of products 45 used to carry the genetic material, which could adversely affect our ability to obtain and maintain regulatory approvals for and commercialize any gene therapy products we may develop.
Furthermore, there is the potential risk of delayed adverse events following exposure to gene therapy products due to persistent biological activity of the genetic material or other components of products used to carry the genetic material, which may adversely affect our ability to obtain and maintain regulatory approvals for and commercialize any gene therapy products we may develop.
Certain provisions of Virginia law, our articles of incorporation and amended and restated bylaws and arrangements with our employees could hamper a third party’s acquisition of us or discourage a third party from attempting to acquire control of us, or limit the price that investors might be willing to pay for shares of our common stock.
Certain provisions of Virginia law, our articles of incorporation and amended and restated bylaws and arrangements with our employees may hamper a third party’s acquisition of us or discourage a third party from attempting to acquire control of us, or limit the price that investors might be willing to pay for shares of our common stock.
In the case of certain specified supply failures, we have the right under our commercialization agreement with PARI to make the nebulizer and have it made by certain third parties, but not those deemed under the commercialization agreement to compete with PARI. We will be reliant on CMOs to manufacture supply of brensocatib and TPIP for our future requirements.
In the case of certain specified supply failures, we have the right under our commercialization agreement with PARI to make the nebulizer and have it made by certain third parties, but not those deemed under the commercialization agreement to compete with PARI. We also will be reliant on CMOs to manufacture supply of TPIP for our future requirements.
Relative to us, most of these entities have substantially greater capital resources, research and development staffs, facilities and experience in conducting clinical studies, obtaining regulatory approvals, and manufacturing and marketing pharmaceutical products. Many of our competitors may achieve product commercialization or obtain patent protection earlier than us.
Relative to us, some of these entities have substantially greater capital resources, research and development staffs, facilities and experience in conducting clinical studies, obtaining regulatory approvals, and manufacturing and marketing pharmaceutical products. Many of our competitors may achieve product commercialization or obtain patent protection earlier than us.
This certification process may lead to litigation and could also delay launch of a product candidate, if approved by regulators.
This certification process may lead to litigation and could also delay approval and launch of a product candidate, if approved by regulators.
Even when a payor determines that a product is eligible for reimbursement, the payor may impose coverage limitations that preclude payment for some uses that are approved by the FDA or non-US regulatory authorities and/or may set a reimbursement rate that is too low to support a profitable sales price for the produ ct.
Even when a payor determines that a product is eligible for reimbursement, the payor may impose coverage limitations that preclude payment for some uses that are approved by the FDA or non-US regulatory authorities and/or may set a reimbursement rate that is too low to support a profitable sales price for the product.
We may not be able to enroll enough patients to conduct and complete our clinical trials or retain a sufficient number of patients in our clinical trials to generate the data necessary for regulatory approval of our product candidates or to permit the use of ARIKAYCE in the broader population of patients with MAC lung disease.
We may not be able to enroll enough patients to conduct and complete our clinical trials or retain a sufficient number of patients in our clinical trials to generate the data necessary for regulatory approval of our product candidates or to gain approval of the use of ARIKAYCE in the broader population of patients with MAC lung disease.
We are also dependent upon PARI being able to provide an adequate supply of nebulizers for commercial sale of ARIKAYCE, any ongoing clinical trials, and future commercial sales of our product candidates that use Lamira as their delivery mechanism, as PARI is the sole manufacturer of Lamira.
We are also dependent on PARI being able to provide an adequate supply of nebulizers for commercial sale of ARIKAYCE, any ongoing clinical trials, and future commercial sales of our product candidates that use Lamira as their delivery mechanism, as PARI is the sole manufacturer of Lamira.
Unauthorized disclosure of or access to sensitive or confidential patient or employee data, including personally identifiable information, whether through breach of computer systems, systems failure, employee negligence, fraud or misappropriation, or otherwise, or whether by our employees or third parties, could result in negative publicity, legal liability and damage to our reputation.
Unauthorized use or disclosure of or access to sensitive patient or employee data, including personally identifiable information, whether through breach of computer systems, systems failure, employee negligence, fraud or misappropriation, or otherwise, or whether by our employees or third parties, could result in negative publicity, legal liability and damage to our reputation.
In addition to any liability we could have for any misuse by us of hazardous materials and chemicals, we could also potentially be liable for activities of our CMOs or other third parties. Any such liability, or even allegations of such liability, could materially adversely affect our results of operations and financial condition.
In addition to any 61 liability we could have for any misuse by us of hazardous materials and chemicals, we may also potentially be liable for activities of our CMOs or other third parties. Any such liability, or even allegations of such liability, may materially adversely affect our results of operations and financial condition.
Changes to the ACA, to the Medicare or Medicaid programs, or to the ability of the federal government to negotiate or otherwise affect drug prices, or other federal legislation regarding healthcare access, financing or legislation in individual states, could affect our business, financial condition, results of operations and prospects and the value of our common stock.
Changes to the ACA, to the Medicare or Medicaid programs, or to the ability of the federal government to negotiate or otherwise affect drug prices, or other federal legislation regarding healthcare access, financing or legislation in individual states, may affect our business, financial condition, results of operations and prospects and the value of our common stock.
We face substantial competition from pharmaceutical, biotechnology and other companies, universities and research institutions with respect to NTM lung disease, bronchiectasis, PAH and PH-ILD, and our gene therapy indications, and will face substantial competition with respect to future product candidates we may develop in these and other disease areas.
We face substantial competition from pharmaceutical, biotechnology and other companies, universities and research institutions with respect to NTM lung disease, bronchiectasis, PAH, PH-ILD, PPF, and IPF, and our gene therapy indications, and will face substantial competition with respect to future product candidates we may develop in these and other disease areas.
Our current and potential future use of artificial intelligence (AI) and machine learning may not be successful and presents new risks and challenges to our business. We currently integrate AI and machine learning in certain of our research and development activities, including identification of potential product candidates, and are seeking to further integrate AI and machine learning throughout our business.
Our current and potential future use of AI and machine learning may not be successful and presents new risks and challenges to our business. We currently integrate AI and machine learning in certain of our research and development activities, including identification of potential product candidates, and are seeking to further integrate AI and machine learning throughout our business.
Likewise, even an investigation by US or foreign authorities of potential violations of the FCPA other anti-corruption laws or Trade Control laws could have an adverse impact on our reputation, business, financial condition, results of operations and prospects and the value of our common stock.
Likewise, even an investigation by US or foreign authorities of potential violations of the FCPA other anti-corruption laws or Trade Control laws may have an adverse impact on our reputation, business, financial condition, results of operations and prospects and the value of our common stock.
A pandemic, including a resurgence of COVID-19, may also have an adverse impac t on our operations and supply chain as a result of (i) our or our third-party manufacturers’ employees or other key personnel becoming infected, (ii) preventive and precautionary measures that governments and we and other businesses, including our third-party manufacturers, are taking, such as border closures, prolonged quarantines and other travel restrictions, (iii) shortages of supplies necessary for the manufacture of ARIKAYCE, including as a result of government orders providing for the requisition of personal protective equipment and other medical supplies and equipment, and (iv) cold-chain storage and shipping limitations resulting from the need to prioritize delivery of vaccines, which could cause disruptions or delays in our ability to distribute ARIKAYCE due to lack of sufficient cold-chain storage and shipping capacity.
A pandemic may also have an adverse impac t on our operations and supply chain as a result of (i) our or our third-party manufacturers’ employees or other key personnel becoming infected, (ii) preventive and precautionary measures that governments and we and other businesses, 56 including our third-party manufacturers, are taking, such as border closures, prolonged quarantines and other travel restrictions, (iii) shortages of supplies necessary for the manufacture of ARIKAYCE or BRINSUPRI, including as a result of government orders providing for the requisition of personal protective equipment and other medical supplies and equipment, and (iv) cold-chain storage and shipping limitations resulting from the need to prioritize delivery of vaccines, which could cause disruptions or delays in our ability to distribute ARIKAYCE due to lack of sufficient cold-chain storage and shipping capacity.
In addition, with respect to our product candidates, our manufacturers and their facilities are subject to pre-approval cGMP inspection by the FDA and other regulatory authorities, and the findings of the cGMP inspection could result in a failure to obtain, or a delay in obtaining, regulatory approval for future product candidates.
In addition, with respect to our product candidates, our manufacturers and their facilities are subject to pre-approval cGMP inspection by the FDA and other regulatory authorities, and the findings of the cGMP inspection may result in a failure to obtain, or a delay in obtaining, regulatory approval for future product candidates.
If, for any reason, we were to lose, or experience a decrease in the amount of business with our largest customers, whether directly or through our distributor relationships, our financial condition and results of operations could be negatively affected.
If, for any reason, we were to lose, or experience a decrease in the amount of business with our largest customers, whether directly or through our distributor relationships, our financial condition and results of operations may be negatively affected.
Approval procedures vary among countries and can involve additional product testing, including additional preclinical studies or clinical trials, and administrative review periods. The time required to obtain approval in these other territories might differ from that required to obtain FDA approval.
Approval procedures vary among countries and can involve additional product testing, including additional pre-clinical studies or clinical trials, and administrative review periods. The time required to obtain approval in these other territories might differ from that required to obtain FDA approval.
To the extent that any disruption or security breach resulted in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development of our product candidates could be delayed.
To the extent that any disruption or security breach resulted in a loss of or damage to data or applications, or unauthorized disclosure of confidential or proprietary information, we could incur liability and the further development of our product candidates could be delayed.
We have limited experience in developing gene therapy programs and cannot be certain that any gene therapy product candidates that we develop will successfully complete preclinical studies and clinical trials, or that they will not cause significant adverse events or toxicities.
We have limited experience in developing gene therapy programs and cannot be certain that any gene therapy product candidates that we develop will successfully complete pre-clinical studies and clinical trials, or that they will not cause significant adverse events or toxicities.
If any of our competitors develops a product that is more effective, safe, tolerable or convenient, or less expensive than ARIKAYCE or our product candidates, it would likely materially adversely affect our ability to generate revenue.
If any of our competitors develops a product that is more effective, safe, tolerable or convenient, or less expensive than ARIKAYCE, BRINSUPRI, or our product candidates, if approved, it would likely materially adversely affect our ability to generate revenue.
New safety or efficacy data from both market surveillance and our clinical trials may result in negative consequences including the following: • Modification to product labeling or promotional statements, such as additional boxed or other warnings or contraindications, or the issuance of additional “Dear Doctor Letters” or similar communications to healthcare professionals; • Required changes in the administration of ARIKAYCE, brensocatib, or TPIP; • Imposition of additional post-marketing surveillance, post-marketing clinical trial requirements, distribution restrictions or other risk management measures, such as a risk evaluation and mitigation strategy (REMS) or a REMS with elements to assure safe use; • Suspension or withdrawal of regulatory approval; • Suspension or termination of ongoing clinical trials or refusal by regulators to approve pending marketing applications or supplements to approved applications; • Suspension of, or imposition of restrictions on, our operations, including costly new manufacturing requirements with respect to ARIKAYCE, brensocatib, or TPIP; and • Voluntary or mandatory product recalls or withdrawals from the market and costly product liability claims.
New safety or efficacy data from both market surveillance and our clinical trials may result in negative consequences including the following: • Modification to product labeling or promotional statements, such as additional boxed or other warnings or contraindications, or the issuance of additional “Dear Doctor Letters” or similar communications to healthcare professionals; • Required changes in the administration of ARIKAYCE, BRINSUPRI, or our product candidates; 44 • Imposition of additional post-marketing surveillance, post-marketing clinical trial requirements, distribution restrictions or other risk management measures, such as a risk evaluation and mitigation strategy (REMS) or a REMS with elements to assure safe use in the US; • Suspension or withdrawal of regulatory approval; • Suspension or termination of ongoing clinical trials or refusal by regulators to approve pending marketing applications or supplements to approved applications; • Suspension of, or imposition of restrictions on, our operations, including costly new manufacturing requirements with respect to ARIKAYCE, BRINSUPRI, or our product candidates; and • Voluntary or mandatory product recalls or withdrawals from the market and costly product liability claims.
We may also encounter delays or rejections based on changes in regulatory agency policies during the period in which we develop a product and the period required for review of any application for regulatory agency approval of a particular 37 product.
We may also encounter delays or rejections based on changes in regulatory agency policies or resources during the period in which we develop a product and the period required for review of any application for regulatory agency approval of a particular product.
While we have experienced no disruption to date in our supply chain due to a pandemic, if we encounter delays or difficulties in the manufacturing process that disrupt our ability to supply ARIKAYCE, we may not be able to satisfy patient demand or we may experience a product stock-out, which would likely have a material adverse effect on our business.
While we have experienced no disruption to date in our supply chain due to a pandemic, if we encounter delays or difficulties in the manufacturing process that disrupt our ability to supply ARIKAYCE or BRINSUPRI, we may not be able to satisfy patient demand or we may experience a product stock-out, which may have a material adverse effect on our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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We have a cybersecurity assessment process, which helps identify our cybersecurity risks by comparing our processes to standards set by the Center for Internet Security. Our processes also assess cybersecurity risks associated with our use of third-party service providers.
We have a cybersecurity assessment process, which helps identify our cybersecurity risks by comparing our processes to standards set by the National Institute of Standards and Technology. Our processes also assess cybersecurity risks associated with our use of third-party service providers.
The reports to management and our Board include updates on the Company’s cyber risks and threats, the status of projects to strengthen our information security systems, assessments of the information security program, and the emerging threat landscape. For the year ended December 31, 2024, we are not aware of any material cybersecurity incidents. 62
The reports to management and our Board include updates on the Company’s cyber risks and threats, the status of projects to strengthen our information security systems, assessments of the information security program, and the emerging threat landscape.
Added
Based on the information available to us as of the filing date of this Annual Report on Form 10-K, we are not aware of any cybersecurity incidents, directly or indirectly, that have materially affected or are reasonably likely to materially affect our business, results of operations, or financial condition.
Added
For more information regarding our risks from cybersecurity threats, see “Risk Factors — Risks Related to the Operation of our Business — Our business and operations, including our drug development and commercialization programs, may be materially disrupted and/or subject to reputational harm in the event of system failures, security breaches, cyber-attacks, deficiencies in cybersecurity, violations of data protection laws or data loss or damage by us or third parties.” 67

Item 2. Properties

Properties — owned and leased real estate

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In July 2023, we expanded this lease to a total of 46,671 square feet and further extended the lease term until April 2027. We also lease facilities in California totaling 54,478 square feet and a facility in New Hampshire. In addition, we lease space outside of the US in France, Ireland, the Netherlands, Switzerland, the UK, and Japan.
In July 2023, we expanded this lease to a total of 46,671 square feet and further extended the lease term until April 2027. We also lease facilities in California totaling 54,478 square feet and New Hampshire totaling 12,668 square feet. In addition, we lease space outside of the US in France, Ireland, the Netherlands, Switzerland, the UK, and Japan.
We did not exercise the one-time option. The initial term of this lease will expire in 2030. We lease laboratory space located in Bridgewater for which we exercised the renewal option to extend the lease term until December 2026.
ITEM 2. PROPERTIES We currently lease 117,022 square feet of office space for our corporate headquarters in Bridgewater, New Jersey. The initial term of this lease will expire in 2030. We lease laboratory space located in Bridgewater for which we exercised the renewal option to extend the lease term until December 2026.
Removed
ITEM 2. PROPERTIES We currently lease 117,022 square feet of office space for our corporate headquarters in Bridgewater, New Jersey. The initial lease, which commenced in the fourth quarter of 2019, provided us a one-time option to expand the leased premises by up to 50,000 square feet prior to the fifth anniversary of the initial lease commencement.
Added
Furthermore, in 2025 we purchased a building intended for use as a laboratory space. The property is located in New Hampshire and consists of 60,000 square feet. The facility has not yet been placed into service.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Any future determination as to the payment of dividends will be dependent upon these and any contractual or other restrictions to which we may be subject and, to the extent permissible thereunder, will be at the sole discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements and other factors our board of directors deems relevant at that time. 64 COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Insmed Incorporated, the NASDAQ Composite Index, the S&P 500 Index, the NASDAQ Biotechnology Index and the SPDR S&P Biotech ETF Index _________________________________ * $100 invested on 12/31/19 in stock or index, including reinvestment of dividends.
Any future determination as to the payment of dividends will be dependent upon these and any contractual or other restrictions to which we may be subject and, to the extent permissible thereunder, will be at the sole discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements and other factors our Board of Directors deems relevant at that time. 69 COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Insmed Incorporated, the NASDAQ Composite Index, the S&P 500 Index, the NASDAQ Biotechnology Index and the SPDR S&P Biotech ETF Index _________________________________ * $100 invested on 12/31/20 in stock or index, including reinvestment of dividends.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our trading symbol is "INSM." Our common stock currently trades on the Nasdaq Global Select Market. As of February 14, 2025, there were approximatel y 148 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our trading symbol is "INSM." Our common stock currently trades on the Nasdaq Global Select Market. As of February 13, 2026, there were approximatel y 140 holders of record of our common stock.
Removed
Fiscal year ending December 31. Copyright© 2025 Standard & Poor's, a division of S&P Global. All rights reserved. 65

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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The A&R Loan Agreement extends the maturity of the Term Loans to September 30, 2029, subject to acceleration to February 1, 2028 on the occurrence of certain prespecified events, and amends the interest rate on the Term Loans to a fixed rate of 9.6% per annum.
The A&R Loan Agreement extends the maturity of the Term Loans to September 30, 2029, subject to acceleration to February 1, 2028 on the occurrence of certain prespecified events, and amends the interest rate on the Term Loans to a fixed rate of 9.6% per annum.
The AZ License Agreement provides AstraZeneca with the option to negotiate a future agreement with us for commercialization of brensocatib in chronic obstructive pulmonary disease or asthma. We have a licensing agreement with PARI for the use of optimized Lamira for delivery of ARIKAYCE in treating patients with NTM lung infections, CF and bronchiectasis.
The AZ License Agreement provides AstraZeneca with 79 the option to negotiate a future agreement with us for commercialization of brensocatib in chronic obstructive pulmonary disease or asthma. We have a licensing agreement with PARI for the use of optimized Lamira for delivery of ARIKAYCE in treating patients with NTM lung infections, CF and bronchiectasis.
Under the licensing agreement, we have rights under several US and 74 foreign issued patents, and patent applications involving improvements to optimized Lamira, to exploit the system with ARIKAYCE for the treatment of such indications, but we cannot manufacture the nebulizers except as permitted under our Commercialization Agreement with PARI, as described below.
Under the licensing agreement, we have rights under several US and foreign issued patents, and patent applications involving improvements to optimized Lamira, to exploit the system with ARIKAYCE for the treatment of such indications, but we cannot manufacture the nebulizers except as permitted under our Commercialization Agreement with PARI, as described below.
We do not have any interest in special purpose entities, structured finance entities or other variable interest entities. CRITICAL ACCOUNTING ESTIMATES Preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions affecting the reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities.
We do not have any interest in special purpose entities, structured finance entities or other variable interest entities. 80 CRITICAL ACCOUNTING ESTIMATES Preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions affecting the reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities.
In addition, we have agreed to pay AstraZeneca tiered royalties ranging from a high single-digit to mid-teens on net sales of any approved product based on brensocatib and one additional payment of $35.0 million upon the first achievement of $1 billion in annual net sales.
In addition, we have agreed to pay AstraZeneca tiered royalties ranging from high single-digit to mid-teens on net sales of any approved product based on brensocatib and one additional payment of $35.0 million upon the first achievement of $1.0 billion in annual net sales.
If we elect to develop brensocatib for a second indication, we will be obligated to make an additional series of contingent milestone payments totaling up to $42.5 million, the first of which occurs at the initiation of a Phase 3 trial in the additional indication. We are not obligated to make any additional milestone payments for any additional indications.
If we elect to develop brensocatib for a second indication, we will be obligated to make an additional series of contingent milestone payments totaling up to $42.5 million, the first of which occurs at the initiation of a Phase 3 trial in the additional indication. We are not obligated to make payments for additional indications.
Either party may terminate (i) any project addendum under the master services agreement for any reason and without cause upon 30 days’ written notice, (ii) any project addendum in the event of the other party’s breach of the master services agreement or such project addendum upon 30 days’ written notice, provided that such breach is not cured within such 30-day period, (iii) the master services agreement or any project addendum immediately upon the occurrence of an insolvency event with respect to the other party or (iv) any project addendum upon 30 days’ written notice if (a) the continuation of the services under such project addendum would post material ethical or safety risks to study participants, (b) any approval from a regulatory authority necessary to perform the applicable study is revoked, suspended or expires without renewal or (c) in the reasonable opinion of such party, continuation of the services provided under such project addendum would be in violation of applicable law.
Either party may terminate (i) any project addendum under the master services agreement for any reason and without cause upon 30 days’ written notice, (ii) any project addendum in the event of the other party’s breach of the master services agreement or such project addendum upon 30 days’ written notice, provided that such breach is not cured within such 30-day period, (iii) the master services agreement or any project addendum immediately upon the occurrence of an insolvency event with respect to the other party or (iv) any project addendum upon 30 days’ written notice if (a) the continuation of the services under such project addendum would pose material ethical or safety risks to study participants, (b) any approval from a regulatory authority necessary to perform the applicable study is revoked, suspended or expires without renewal or (c) in the reasonable opinion of such party, continuation of the services provided under such project addendum would be in violation of applicable law.
In May 2024, we completed an underwritten offering of 14,514,562 shares of our common stock at a public offering price of $51.50 per share. 1,893,203 of the shares of common stock were issued pursuant to the exercise in full of the underwriters' option to purchase additional shares.
In May 2024, we completed an underwritten offering of 14,514,562 shares of our common stock at a public offering price of $51.50 per share. 1,893,203 of the shares of common stock were issued pursuant to the exercise in full of the 76 underwriters' option to purchase additional shares.
The change in fair value of deferred and contingent consideration liabilities is calculated quarterly with gains and losses recorded in the consolidated statements of comprehensive loss. Our deferred consideration liabilities were fully settled in the third quarter of 2024. As of December 31, 2024, only contingent consideration liabilities exist.
The change in fair value of deferred and contingent consideration liabilities is calculated quarterly with gains and losses recorded in the consolidated statements of comprehensive loss. Our deferred consideration liabilities were fully settled in the third quarter of 2024. As of December 31, 2025 and 2024, only contingent consideration liabilities exist.
We cannot predict whether or when new products or new indications for marketed products will receive regulatory approval or, if any such approval is received, whether we will be able to successfully commercialize such products and whether or when they may become profitable.
We cannot predict whether or when new products or new indications for marketed products will receive regulatory approval or, if any such approval is received, whether we will be able to successfully commercialize such products and whether or when we may become profitable.
Our net proceeds from the sale of the shares, after deducting underwriting discounts and estimated offering expenses of $34.3 million, were $713.2 million. 71 In October 2022, we entered into a $350.0 million Tranche A Term Loan with Pharmakon that would have matured on October 19, 2027.
Our net proceeds from the sale of the shares, after deducting underwriting discounts and offering expenses of $34.3 million, were $713.2 million. In October 2022, we entered into a $350.0 million Tranche A Term Loan with Pharmakon that would have matured on October 19, 2027.
Although it is difficult to predict our future funding requirements, based upon our current operating plan, we anticipate that our cash and cash equivalents and marketable securities as of December 31, 2024 will enable us to fund our operations for at least the next 12 months.
Although it is difficult to predict our future funding requirements, based upon our current operating plan, we anticipate that our cash and cash equivalents and marketable securities as of December 31, 2025 will enable us to fund our operations for at least the next 12 months.
Our ability to reduce our operating loss and begin to generate positive cash flow from operations depends on the continued success in commercializing ARIKAYCE and achieving positive results from the ARIKAYCE confirmatory clinical trial program in order to obtain full approval of ARIKAYCE in the US and potentially reach more patients.
Our ability to reduce our operating loss and begin to generate positive cash flow from operations depends on the continued success in commercializing our marketed products and achieving positive results from the ARIKAYCE confirmatory clinical trial program in order to obtain full approval of ARIKAYCE in the US and potentially reach more patients.
Contractual Obligations In October 2022, we entered into financings resulting in aggregate gross proceeds of $500.0 million, comprised of the $350.0 million Tranche A Term Loan with funds managed by Pharmakon and the $150.0 million Royalty Financing Agreement with OrbiMed, which was subsequently amended in October 2024.
In October 2022, we entered into financings resulting in aggregate gross proceeds of $500.0 million, comprised of the $350.0 million Tranche A Term Loan with funds managed by Pharmakon and the $150.0 million Royalty Financing Agreement with OrbiMed, which was subsequently amended in October 2024.
Under these agreements, we are required to deliver to Patheon Inc. the active pharmaceutical ingredients needed to manufacture brensocatib. In addition, in September 2024, we entered into a commercial manufacturing and supply agreement with Esteve for the manufacture and supply of brensocatib's active pharmaceutical ingredient.
Under these agreements, we are required to deliver to Patheon Inc. the active pharmaceutical ingredients needed to manufacture BRINSUPRI and brensocatib. In addition, in September 2024, we entered into a commercial manufacturing and supply agreement with Esteve for the manufacture and supply of BRINSUPRI's and brensocatib's active pharmaceutical ingredient.
Comparison of the Years Ended December 31, 2023 and 2022 Please refer to the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for a comparative discussion of our fiscal years ended December 31, 2023 and December 31, 2022.
Comparison of the Years Ended December 31, 2024 and 2023 Please refer to the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for a comparative discussion of our fiscal years ended December 31, 2024 and December 31, 2023.
We have raised $2.2 billion in net proceeds from securities offerings and other financing transactions since January 1, 2022. We believe we currently have sufficient funds to meet our financial needs for at least the next 12 months.
We have raised $2.2 billion in net proceeds from securities offerings and other financing transactions since January 1, 2023. We believe we currently have sufficient funds to meet our financial needs for at least the next 12 months.
The income tax provision for the years ended December 31, 2024 and 2023 reflects the income tax expense recorded as a result of taxable income in certain of our subsidiaries in Europe and Japan, as well as a liability for certain state income taxes.
The income tax provision for the years ended December 31, 2025 and 2024 reflects the income tax expense recorded as a result of taxable income in certain of our subsidiaries in Europe and Japan, as well as a liability for certain state income taxes.
R&D expenses also include other internal operating expenses, the cost of manufacturing product candidates, including the medical devices for drug delivery, for clinical study, the cost of conducting clinical studies, and the cost of conducting preclinical and research activities.
R&D expenses also include other internal operating expenses, the cost of manufacturing product candidates, including the medical devices for drug delivery, for clinical study, the cost of conducting clinical studies, and the cost of conducting pre-clinical and research activities.
If any, or all, of our actual experience vary from the estimates above, we may need to adjust prior period accruals, affecting revenue in the period of adjustment. 76
If any, or all, of our actual experience vary from the estimates above, we may need to adjust prior period accruals, affecting revenue in the period of adjustment. 81
In May 2024, u pon our release of an official public statement that we intended to file an NDA, we incurred an additional $12.5 million milestone payment obligation. Upon regulatory approval by the FDA of an NDA, we will owe AstraZeneca an additional $30.0 million.
In May 2024, u pon our release of an official public statement that we intended to file an NDA, we incurred an additional $12.5 million milestone payment obligation. Upon regulatory approval by the FDA of an NDA, we paid AstraZeneca an additional $30.0 million.
LIQUIDITY AND CAPITAL RESOURCES Overview There is considerable time and cost associated with developing potential pharmaceutical products to the point of regulatory approval and commercialization. We commenced commercial shipments of ARIKAYCE in October 2018.
LIQUIDITY AND CAPITAL RESOURCES Overview There is considerable time and cost associated with developing potential pharmaceutical products to the point of regulatory approval and commercialization. We commenced commercial shipments of ARIKAYCE in October 2018 and BRINSUPRI in August 2025.
In October 2022, we entered into the Royalty Financing Agreement with OrbiMed, whereby OrbiMed paid us $150.0 million in exchange for the right to receive, on a quarterly basis, royalties in an amount equal to 4.0% of ARIKAYCE global net sales prior to September 1, 2025 and 4.5% of ARIKAYCE global net sales on or after September 1, 2025, as well as 0.75% of brensocatib global net sales, if approved.
In October 2022, we entered into the Royalty Financing Agreement with OrbiMed, whereby OrbiMed paid us $150.0 million in exchange for the right to receive, on a quarterly basis, royalties in an amount equal to 4.0% of ARIKAYCE global net sales prior to September 1, 2025 and 4.5% of ARIKAYCE global net sales on or after September 1, 2025, as well as 0.75% of brensocatib global net sales, which includes BRINSUPRI.
The initial Lease term runs 130 months from the Commencement Date and we have the option to extend that term for up to three additional five-year periods. In addition, we are responsible for operating expenses and taxes pursuant to the Lease. Future minimum payments under the Lease during the initial Lease term are approximately $15.3 million.
The initial Lease term runs 130 months from the Commencement Date and we have the option to extend that term for up to three additional five-year periods. In addition, we are responsible for operating expenses and taxes pursuant to the Lease. Future minimum payments under the Lease during the initial Lease term are approximately $12.7 million.
In October 2024, we entered into the A&R Loan Agreement with BioPharma Credit PLC, BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon, and the guarantors party to such agreement.
In October 2024, we entered into the A&R Loan Agreement, as amended July 10, 2025, with BioPharma Credit PLC, BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon, and the guarantors party to such agreement.
Under the Royalty Financing Agreement, OrbiMed will be entitled to receive royalties of 4.0% on ARIKAYCE global net sales until September 1, 2025, and royalties of 4.5% on ARIKAYCE global net sales on or after September 1, 2025, as well as royalties of 0.75% on brensocatib global net sales, if approved.
Under the Royalty Financing Agreement, OrbiMed will be entitled to receive royalties of 4.0% on ARIKAYCE global net sales until September 1, 2025, and royalties of 4.5% on ARIKAYCE global net sales on or after September 1, 2025, as well as royalties of 0.75% on brensocatib global net sales, which includes BRINSUPRI.
In April 2020, we entered into a master services agreement with PPD pursuant to which we retained PPD to perform clinical development services in connection with certain of our clinical research programs. The master services agreement has an initial term of five years.
In April 2020, we entered into a master services agreement with PPD pursuant to which we retained PPD to perform clinical development services in connection with certain of our clinical research programs. The master services agreement has an initial term of five years. In March 2025, we amended the agreement to extend the term three years.
SG&A expenses also include professional fees for legal services, consulting services, including commercial activities, insurance, board of director fees, tax and accounting services and certain milestones related to ARIKAYCE. Amortization of Intangible Assets Upon commercialization of ARIKAYCE, our intangible assets began to be amortized over their estimated useful lives.
SG&A expenses also include professional fees for legal services, consulting services, including commercial activities, insurance, board of director fees, tax and accounting services. Amortization of Intangible Assets Upon commercialization of each of ARIKAYCE and BRINSUPRI, the related intangible assets began to be amortized over their estimated useful lives.
We expect to continue to incur consolidated operating losses, including losses at our US and certain international entities, as we plan to fund R&D for ARIKAYCE, brensocatib, TPIP and our other pipeline programs, continue commercialization and regulatory activities for ARIKAYCE, fund commercial readiness activities for brensocatib, and engage in other general and administrative activities.
We expect to continue to incur consolidated operating losses, including losses at our US and certain international entities, as we plan to fund R&D for ARIKAYCE, TPIP, brensocatib, INS1148, INS1201, INS1202, and our other pipeline programs, continue commercialization and regulatory activities for ARIKAYCE and BRINSUPRI, and engage in other general and administrative activities.
We expect that our future capital requirements may be substantial and will depend on many factors, including: • The timing, outcome, and cost of our ongoing and anticipated clinical trials for our product candidates; • The timing and cost of our current and future clinical trials of ARIKAYCE for the treatment of patients with NTM lung infections, including the ENCORE trial; • The cost of discovering or in-licensing additional product candidates; • The costs of activities related to the regulatory approval process and the timing of approvals, if received; • The cost of supporting the sales and marketing efforts necessary to support the continued commercial efforts of ARIKAYCE; • The timing and costs of supporting the commercial launch activities of brensocatib, if approved; • The cost of eventually supporting the commercial launches of TPIP and our other product candidates; • The cost of filing, prosecuting, defending, and enforcing patent claims; • The costs of our manufacturing-related activities; • The cost of hiring more personnel to support our ongoing development and commercialization efforts; and • The levels, timing and collection of revenue earned from sales of ARIKAYCE and other products approved in the future, if any.
We expect that our future capital requirements may be substantial and will depend on many factors, including: • The timing, outcome, and cost of our ongoing and anticipated clinical trials for our product candidates; • The cost of supporting the sales and marketing efforts necessary to support the continued commercial efforts of our marketed products; • The cost of discovering or in-licensing additional product candidates; • The costs of activities related to the regulatory approval process and the timing of approvals, if received; • The timing and costs of supporting the commercial launch activities of BRINSUPRI in additional markets, if any; • The cost of eventually supporting the commercial launches of TPIP and our other product candidates, if approved; • The cost of filing, prosecuting, defending, and enforcing patent claims; • The costs of our manufacturing-related activities; • The cost of hiring more personnel to support our ongoing development and commercialization efforts; and • The levels, timing and collection of revenue earned from sales of our marketed products and other products approved in the future, if any.
The increase was primarily due to an increase in our average cash and cash equivalents and marketable securities balances in 2024 relative to 2023. Interest Expense Interest expense was $84.9 million for the year ended December 31, 2024 as compared to $81.7 million for the year ended December 31, 2023.
The increase was primarily due to an increase in our average cash and cash equivalents and marketable securities balances in 2025 relative to 2024. Interest Expense Interest expense was $83.8 million for the year ended December 31, 2025 as compared to $84.9 million for the year ended December 31, 2024.
The change is related to the fair value of the potential future consideration to be paid to former equityholders of the businesses we have acquired. Investment Income Investment income was $53.3 million for the year ended December 31, 2024 as compared to $42.1 million for the year ended December 31, 2023.
The change is related to the fair value of the potential future consideration to be paid to former equityholders of certain businesses we have acquired. Investment Income Investment income was $60.7 million for the year ended December 31, 2025 as compared to $53.3 million for the year ended December 31, 2024.
The aggregate investment to increase our long-term production capacity, including under the Patheon agreements and related agreements or purchase orders with third parties for raw materials and fixed assets, is estimated to be approximately $116.0 million.
The aggregate investment to increase our long-term production capacity, including under the Patheon agreements and related agreements or purchase orders with third parties for raw materials and fixed assets, is estimated to be app roximately $127.7 million.
For all contracts that fall into the scope of ASC 606, we have identified one performance obligation: the sale of ARIKAYCE to our customers. We have not incurred or capitalized any incremental costs associated with obtaining contracts with customers. Product revenues, net, consist of net sales of ARIKAYCE. Our customers in the US include specialty pharmacies and specialty distributors.
For all contracts that fall into the scope of ASC 606, we have identified one performance obligation: the sale of marketed products to our customers. We have not incurred or capitalized any incremental costs associated with obtaining contracts with customers. Product revenues, net, consist of global net sales of ARIKAYCE and US net sales of BRINSUPRI.
Change in Fair Value of Deferred and Contingent Consideration Liabilities The change in fair value of deferred and contingent consideration liabilities for the year ended December 31, 2024 was $91.7 million and was primarily due to the increase in our share price.
Change in Fair Value of Deferred and Contingent Consideration Liabilities The change in fair value of deferred and contingent consideration liabilities for the year ended December 31, 2025 was $252.0 million and was primarily due to the increase in our share price.
In October 2016, we entered into the AZ License Agreement, pursuant to which AstraZeneca granted us exclusive global rights for the purpose of developing and commercializing AZD7986 (which we renamed brensocatib).
In October 2016, we entered into the AZ License Agreement, pursuant to which AstraZeneca granted us exclusive global rights for the purpose of developing and commercializing AZD7986 (which we renamed brensocatib). Following FDA approval, brensocatib was commercially designated as BRINSUPRI.
Provision for Income Taxes The income tax provision was $3.7 million for the year ended December 31, 2024 as compared to $2.6 million for the year ended December 31, 2023.
Provision for Income Taxes The income tax provision was $5.0 million for the year ended December 31, 2025 as compared to $3.7 million for the year ended December 31, 2024.
Our cash requirements for the next 12 months will be impacted by a number of factors, the most significant of which we expect to be expenses related to our commercialization efforts and our ARISE and ENCORE clinical trials for ARIKAYCE, and other development activities for brensocatib, and to a lesser extent, expenses related to the clinical development of TPIP and INS1201, and our pre-clinical research programs.
Our cash requirements for the next 12 months will be impacted by a number of factors, the most significant of which we expect to be expenses related to our commercialization efforts for ARIKAYCE and BRINSUPRI and development costs for our clinical-stage assets, and, to a lesser extent, our pre-clinical research programs.
We expect SG&A expenses to continue to increase in 2025 relative to 2024 due, in part, to commercial readiness activities, and commercial activities for brensocatib, if approved. Amortization of Intangible Assets Amortization of intangible assets for both the years ended December 31, 2024 and 2023 was $5.1 million.
We expect SG&A expenses to continue to increase in 2026 relative to 2025 due, in part, to commercial activities for BRINSUPRI. Amortization of Intangible Assets Amortization of intangible assets for the years ended December 31, 2025 and 2024 was $6.0 million and $5.1 million, respectively.
We have entered into project addenda with PPD to perform clinical development services over several years for, but not limited to, our ARISE, ENCORE and ASPEN studies and other trials involving brensocatib and TPIP. The total cost of these project addenda is $498.9 million.
We have entered into project addenda with PPD to perform clinical development services over several years for, but not limited to, our PALM-ILD and PAH studies and other trials involving brensocatib and TPIP. The anticipated future cost of these project addenda is $295.7 million.
The total royalty payable to OrbiMed is capped at 1.8x of the $150.0 million purchase price or up to a maximum of 1.9x of the $150.0 million purchase price under certain conditions. For more information, see Note 10 - Debt and Note 11 - Royalty Financing Agreement in our notes to the consolidated financial statements.
The total royalty payable to OrbiMed is capped at 1.8x of the $150.0 million purchase price or up to a maximum of 1.9x of the $150.0 million purchase price under certain conditions. See Note 10 - Debt and Note 11 - Royalty Financing Agreement in this Annual Report on Form 10-K for further details.
Our financial results may fluctuate from quarter to quarter and will depend on, among other factors, the net sales of ARIKAYCE; the scope and progress of our research and development efforts; and the timing of certain expenses.
We also expect to continue to incur significant costs related to the commercialization of our marketed products. Our financial results may fluctuate from quarter to quarter and will depend on, among other factors, the net sales of our marketed products; the scope and progress of our research and development efforts; and the timing of certain expenses.
Cost of Product Revenues (Excluding Amortization of Intangibles) Cost of product revenues (excluding amortization of intangibles) for the years ended December 31, 2024 and 2023 were comprised of the following (in thousands): Years Ended December 31, Increase (decrease) 2024 2023 $ % Cost of product revenues (excluding amortization of intangibles) $ 85,742 $ 65,573 $ 20,169 30.8% Cost of product revenues, as % of revenues 23.6 % 21.5 % Cost of product revenues (excluding amortization of intangibles) were $85.7 million for the year ended December 31, 2024 as compared to $65.6 million for the year ended December 31, 2023, an increase of $20.2 million, or 30.8%.
Cost of Product Revenues (Excluding Amortization of Intangibles) Cost of product revenues (excluding amortization of intangibles) for the years ended December 31, 2025 and 2024 were comprised of the following (in thousands): Years Ended December 31, Increase (decrease) 2025 2024 $ % Cost of product revenues (excluding amortization of intangibles) $ 122,938 $ 85,742 $ 37,196 43.4% Cost of product revenues, as % of revenues 20.3 % 23.6 % Cost of product revenues (excluding amortization of intangibles) were $122.9 million for the year ended December 31, 2025 as compared to $85.7 million for the year ended December 31, 2024, an increase of $37.2 million, or 43.4%.
We began capitalizing ARIKAYCE related inventory upon FDA approval of ARIKAYCE in September 2018. Research and Development (R&D) Expenses 67 R&D expenses consist of salaries, benefits and other related costs, including stock-based compensation, for personnel serving in our research and development functions.
Research and Development (R&D) Expenses R&D expenses consist of salaries, benefits and other related costs, including stock-based compensation, for personnel serving in our research and development functions.
The increase in cash used in operating activities for the year ended December 31, 2024 as compared to 2023 was primarily due to the increase in net loss, excluding the adjustments to reconcile net loss to net cash used in operating activities.
The increase in cash used in operating activities for the year ended December 31, 2025 as compared to 2024 was primarily due to the increase in net loss, excluding the adjustments to reconcile net loss to net cash used in operating activities. 77 Net cash used in investing activities was $64.6 million and $583.2 million for the years ended December 31, 2025 and 2024, respectively.
Net cash provided by financing activities was $1.3 billion and $168.4 million for the years ended December 31, 2024 and 2023, respectively.
Net cash provided by financing activities was $954.1 million and $1,341.0 million for the years ended December 31, 2025 and 2024, respectively.
We expect to continue to incur substantial expenses related to our research and development activities as we continue the ARIKAYCE confirmatory clinical program, conduct studies to explore the potential of brensoca tib in additional neutrophil-mediated diseases, inc luding CRSsNP and HS, continue the trials for TPIP, and fund development of our pre-clinical research programs.
We expect to continue to incur substantial expenses related to our research and development activities as we continue the ARIKAYCE confirmatory clinical program, conduct studies to explore the potential of brensocatib in HS, conduct trials of TPIP in PH-ILD, PAH, PPF, and IPF, and fund development of our pre-clinical research programs.
Our interest rate swap was not designated as a hedging instrument for accounting purposes. We settled and terminated the Swap Contract in October 2024. All changes in the fair value of the Swap Contract were reported as change in fair value of interest rate swap in the consolidated statements of comprehensive loss.
Our interest rate swap was not designated as a hedging instrument for accounting purposes. We settled and terminated the Swap Contract in October 2024.
P rior to settlement and termination of the Swap Contract in October 2024, adjustments to the fair value were due to changes in interest rates during 2024 relative to the interest rate of the Swap Contract as of December 31, 2023.
Change in Fair Value of Interest Rate Swap Prior to settlement and termination of the Swap Contract in October 2024, the change in fair value of interest rate swap was due to changes in interest rates during 2024 relative to the interest rate of the Swap Contract .
In October 2024, we entered into the A&R Loan Agreement with BioPharma Credit PLC, BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon, and the guarantors party to such agreement.
In October 2024, we entered into the A&R Loan Agreement, as amended July 10, 2025, with BioPharma Credit PLC, BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon, and the guarantors party to such agreement. The A&R Loan Agreement, among other items, provides an additional $150.0 million senior secured Tranche B Term Loan.
However, our business strategy may require us to raise additional capital at any time through equity or debt financing(s), strategic transactions or otherwise. 75 Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
The net cash used in operating activities during the years ended December 31, 2024 and 2023 was primarily for the commercial, clinical, and manufacturing activities related to ARIKAYCE, as well as other SG&A expenses and clinical trial expenses related to brensocatib and TPIP.
Net cash used in operating activities was $935.0 million and $683.9 million for the years ended December 31, 2025 and 2024, respectively, which was primarily driven by commercial, clinical, and manufacturing activities related to ARIKAYCE, commercial and commercial readiness activities for BRINSUPRI, as well as other SG&A expenses, clinical trial expenses related to brensocatib and TPIP, and the $40.0 million acquisition of INS1148.
This increase was primarily due to the $65.8 million increase in compensation and benefit-related expenses and stock-based compensation costs due to an increase in headcount, a $21.2 million increase in manufacturing expense, the $12.5 million AstraZeneca milestone upon our release of an official public statement that we intended to file an NDA for brensocatib, and a $9.5 million increase in regulatory, quality assurance, and medical affairs expense, partially offset by the $86.7 million non-cash asset acquisition cost of Adrestia and Vertuis in 2023.
This increase was primarily due to the $76.7 million increase in compensation and benefit-related expenses and stock-based compensation costs due to an increase in headcount, a $45.5 million increase in manufacturing expense, and the $40.0 million up-front cash consideration in connection with the acquisition of INS1148, partially offset by the $12.5 million AstraZeneca milestone upon our release of an official public statement that we intended to file an NDA for brensocatib in 2024.
This increase was primarily due to a $60.8 million 70 increase in compensation and benefit-related expenses and stock-based compensation costs due to an increase in headcount as part of commercial readiness activities for brensocatib, a $35.5 million increase in professional fees and other external expenses driven by commercial readiness activities for brensocatib, and a $20.3 million increase in facility-related and other internal expens es.
This increase was primarily due to a $113.5 million 75 increase in compensation and benefit-related expenses and stock-based compensation costs due to an increase in headcount, and a $107.6 million increase in professional fees and other external expenses, both driven by commercial and commercial readiness activities for BRINSUPRI .
For more information, see Note 10 - Debt in our notes to the consolidated financial statements. 73 In January 2024, we entered into certain agreements with Patheon Inc., a wholly-owned subsidiary of Thermo Fisher, related to the manufacture and supply of brensocatib by Patheon Inc. for our anticipated long-term commercial needs.
See Note 10 - Debt in this Annual Report on Form 10-K for further details. 78 In January 2024, we entered into certain agreements with Patheon Inc., a wholly-owned subsidiary of Thermo Fisher, related to the manufacture and supply of commercial brensocatib products, including BRINSUPRI, for our commercial needs and brensocatib for our clinical needs by Patheon Inc.
Rebates: We contract with certain government agencies and managed care organizations, or collectively, third-party payors, so that ARIKAYCE will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. We estimate the rebates we will provide to third-party payors and deduct these estimated amounts from total gross product revenues at the time the revenues are recognized.
Rebates : We contract with certain government agencies and managed care organizations, or collectively, third-party payors, so that our marketed products will be eligible for purchase by, or partial or full reimbursement from, such third-party payors.
Our continued success also depends on commercializing brensocatib, if approved, as well as bringing additional clinical stage products to market, such as TPIP and INS1201, and advancement of our pre-clinical research programs.
Our continued success also depends on obtaining regulatory approval for brensocatib in an additional indication, bringing additional clinical stage products, such as TPIP, INS1148, INS1201, and INS1202, to market and advancing our pre-clinical research programs.
TPIP is an inhaled formulation of the treprostinil prodrug treprostinil palmitil which may offer a differentiated product profile for PH-ILD and PAH. INS1201 is an intrathecally delivered gene therapy for patients with DMD. Our pre-clinical research programs encompass a wide range of technologies and modalities, including gene therapy, AI-driven protein engineering, protein manufacturing, RNA end-joining, and synthetic rescue.
The clinical-stage programs in our Neuro & Other Rare therapeutic area are INS1201, an intrathecally delivered gene therapy for patients with DMD, and INS1202, an intrathecally delivered gene therapy for patients with ALS. Our pre-clinical research programs encompass a wide range of technologies and modalities, including gene therapy, AI-driven protein engineering, protein manufacturing, RNA end-joining, and synthetic rescue.
We may need to raise additional capital to fund our operations, the continued commercialization of ARIKAYCE, commercial readiness activities for the launch of brensocatib for the treatment of patients with bronchiectasis, if approved, clinical trials for brensocatib, TPIP, INS1201, and our future product candidates, and to develop, acquire, in-license or co-promote other products or product candidates, including those that address serious diseases.
We may raise additional capital to fund development of our future product candidates, and to develop, acquire, in-license or co-promote other products or product candidates, including those that address serious diseases with significant unmet need.
These contracts with CROs set forth the scope of work to be completed at a fixed fee or amount per patient enrolled. Payments under these contracts with CROs primarily depend on performance criteria such as the successful enrollment of patients or the completion of clinical trial milestones as well as time-based fees.
Payments under these contracts with CROs primarily depend on performance criteria such as the successful enrollment of patients or the completion of clinical trial milestones as well as time-based fees. Expenses are accrued based on contracted amounts applied to the level of patient enrollment and to activity according to the clinical trial protocol.
Subsequent to this milestone, we are also obligated to make a series of additional contingent milestone payments totaling up to an additional $30.0 million upon the achievement of regulatory filing milestones.
In November 2025, a $15.0 million milestone commitment became payable to AstraZeneca upon EC approval of BRINSUPRI. Subsequent to this milestone, we are also obligated to make an additional $15.0 million contingent payment upon the achievement of a regulatory filing milestone.
R&D Expenses R&D expenses for the years ended December 31, 2024 and 2023 were comprised of the following (in thousands): 69 Years Ended December 31, Increase (decrease) 2024 2023 $ % External Expenses Clinical development and research $ 171,635 $ 166,448 $ 5,187 3.1% AstraZeneca milestone 12,500 — 12,500 NA Manufacturing 94,766 73,614 21,152 28.7% Regulatory, quality assurance, and medical affairs 36,476 27,002 9,474 35.1% Non-cash asset acquisitions — 86,747 (86,747) (100.0)% Subtotal—external expenses $ 315,377 $ 353,811 $ (38,434) (10.9)% Internal Expenses Compensation and benefit-related expenses $ 194,907 $ 140,861 $ 54,046 38.4% Stock-based compensation 47,674 35,880 11,794 32.9% Other internal operating expenses 40,409 40,459 (50) (0.1)% Subtotal—internal expenses $ 282,990 $ 217,200 $ 65,790 30.3% Total R&D expenses $ 598,367 $ 571,011 $ 27,356 4.8% R&D expenses were $598.4 million for the year ended December 31, 2024 as compared to $571.0 million for the year ended December 31, 2023, an increase of $27.4 million, or 4.8%.
R&D Expenses R&D expenses for the years ended December 31, 2025 and 2024 were comprised of the following (in thousands): 74 Years Ended December 31, Increase (decrease) 2025 2024 $ % External Expenses Clinical development and research $ 178,037 $ 171,635 $ 6,402 3.7% Manufacturing 140,245 94,766 45,479 48.0% Regulatory, quality assurance, and medical affairs 43,742 36,476 7,266 19.9% AstraZeneca milestone — 12,500 (12,500) (100.0)% INS1148 asset acquisition 40,000 — 40,000 NA Subtotal—external expenses $ 402,024 $ 315,377 $ 86,647 27.5% Internal Expenses Compensation and benefit-related expenses $ 249,203 $ 194,907 $ 54,296 27.9% Stock-based compensation 70,046 47,674 22,372 46.9% Other internal operating expenses 49,820 40,409 9,411 23.3% Subtotal—internal expenses $ 369,069 $ 282,990 $ 86,079 30.4% Total R&D expenses $ 771,093 $ 598,367 $ 172,726 28.9% R&D expenses were $771.1 million for the year ended December 31, 2025 as compared to $598.4 million for the year ended December 31, 2024, an increase of $172.7 million, or 28.9%.
Refer to Part I, Item 1. "Business" for a summary of our ongoing commercial and clinical programs for ARIKAYCE and our ongoing clinical activities for brensocatib, TPIP, INS1201, and pre-clinical research programs. Prior to 2019, we had not generated significant revenue and through December 31, 2024, we had an accumulated deficit of $4.4 billion.
Refer to Part I, Item 1. "Business" for a detailed discussion of our ongoing commercial and clinical programs. Prior to 2019, we had not generated significant revenue, and through December 31, 2025, we had an accumulated deficit of $5.6 billion. We have financed our operations primarily through the public offerings of our equity securities, debt financings and revenue interest financings.
Revenue is recorded at net selling price (transaction price), which includes estimates of variable consideration for which reserves are established for estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as a current liability.
Revenue is recorded at net selling price (transaction price), which includes estimates of variable consideration for which reserves are established for (a) customer credits, such as invoice discounts for prompt pay, (b) estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates, (c) estimated chargebacks, and (d) estimated costs of co-payment assistance.
In addition, R&D expenses include payments to third parties for the license rights to products in development (prior to marketing approval), such as brensocatib, and may include the cost of asset acquisitions.
In addition, R&D expenses include payments to third parties for the license rights to products in development (prior to marketing approval), and may include the cost of asset acquisitions. Our R&D expenses related to manufacturing our product candidates and medical devices for clinical study are primarily related to activities at CMOs that manufacture our product candidates and early-stage research activities.
Such amounts are then recognized as an expense as the related goods are delivered or the services are performed.
Deposits for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are then recognized as an expense as the related goods are delivered or the services are performed.
EXECUTIVE OVERVIEW We are a people-first global biopharmaceutical company striving to deliver first- and best-in-class therapies to transform the lives of patients facing serious diseases. Our first commercial product, ARIKAYCE, was approved in the US in September 2018, in the EU in October 2020 and in Japan in March 2021.
EXECUTIVE OVERVIEW We are a people-first global biopharmaceutical company striving to deliver first- and best-in-class therapies to transform the lives of patients facing serious diseases. Our commercial portfolio and clinical pipeline are organized around three therapeutic areas: Respiratory, Immunology & Inflammation, and Neuro & Other Rare.
Cost of Product Revenues (Excluding Amortization of Intangible Assets) Cost of product revenues (excluding amortization of intangible assets) consist primarily of direct and indirect costs related to the manufacturing of ARIKAYCE sold, including third-party manufacturing costs, packaging services, freight, and allocation of overhead costs, in addition to royalty expenses.
We recognize revenue for product received by our customers net of allowances for customer credits, including prompt pay discounts, service fees, estimated rebates, including government rebates, such as Medicaid rebates and Medicare Part D reimbursements in the US, and chargebacks. 72 Cost of Product Revenues (Excluding Amortization of Intangible Assets) Cost of product revenues (excluding amortization of intangible assets) consist primarily of direct and indirect costs related to the manufacturing of ARIKAYCE and BRINSUPRI sold, including third-party manufacturing costs, packaging services, freight, and allocation of overhead costs, in addition to royalty expenses.
External R&D expenses by product for the years ended December 31, 2024 and 2023 were comprised of the following (in thousands): Years Ended December 31, Increase (decrease) 2024 2023 $ % ARIKAYCE external R&D expenses $ 60,269 $ 62,418 $ (2,149) (3.4)% Brensocatib external R&D expenses 98,569 108,556 (9,987) (9.2)% TPIP external R&D expenses 65,935 50,185 15,750 31.4% Non-cash asset acquisitions — 86,747 (86,747) (100.0)% AstraZeneca milestone 12,500 — 12,500 NA Other external R&D expenses 78,104 45,905 32,199 70.1% Total external R&D expenses $ 315,377 $ 353,811 $ (38,434) (10.9)% We expect R&D expenses to increase in 2025 relative to 2024 primarily d ue to our clinical trial activities and related spend including our confirmatory clinical trial of ARIKAYCE in a treatment setting for patients with MAC lung disease, our TPIP and brensocatib clinical trials, and other research efforts for our product candidates.
External R&D expenses by product for the years ended December 31, 2025 and 2024 were comprised of the following (in thousands): Years Ended December 31, Increase (decrease) 2025 2024 $ % ARIKAYCE external R&D expenses $ 41,441 $ 60,269 $ (18,828) (31.2)% Brensocatib external R&D expenses 96,516 98,569 (2,053) (2.1)% TPIP external R&D expenses 94,201 65,935 28,266 42.9% INS1148 asset acquisition 40,000 — 40,000 NA AstraZeneca milestone — 12,500 (12,500) (100.0)% Other external R&D expenses 129,866 78,104 51,762 66.3% Total external R&D expenses $ 402,024 $ 315,377 $ 86,647 27.5% We expect R&D expenses to increase in 2026 relative to 2025 primarily d ue to our clinical trial activities and related spend, including our TPIP and brensocatib clinical trials, and other research efforts for our product candid ates.
SG&A Expenses SG&A expenses for the years ended December 31, 2024 and 2023 were comprised of the following (in thousands): Years Ended December 31, Increase (decrease) 2024 2023 $ % Compensation and benefit-related expenses $ 168,498 $ 117,926 $ 50,572 42.9% Stock-based compensation 49,161 38,898 10,263 26.4% Professional fees and other external expenses 173,631 138,151 35,480 25.7% Facility related and other internal expenses 69,826 49,526 20,300 41.0% Total SG&A expenses $ 461,116 $ 344,501 $ 116,615 33.9% SG&A expenses were $461.1 million during the year ended December 31, 2024 as compared to $344.5 million for the year ended December 31, 2023, an increase of $116.6 million, or 33.9%.
SG&A Expenses SG&A expenses for the years ended December 31, 2025 and 2024 were comprised of the following (in thousands): Years Ended December 31, Increase (decrease) 2025 2024 $ % Compensation and benefit-related expenses $ 248,498 $ 168,498 $ 80,000 47.5% Stock-based compensation 82,664 49,161 33,503 68.1% Professional fees and other external expenses 281,187 173,631 107,556 61.9% Facility related and other internal expenses 88,818 69,826 18,992 27.2% Total SG&A expenses $ 701,167 $ 461,116 $ 240,051 52.1% SG&A expenses were $701.2 million during the year ended December 31, 2025 as compared to $461.1 million for the year ended December 31, 2024, an increase of $240.1 million, or 52.1%.
Product Revenues, Net Product revenues, net, consist of net sales of ARIKAYCE.
KEY COMPONENTS OF OUR RESULTS OF OPERATIONS Product Revenues, Net Product revenues, net, consist of net sales of ARIKAYCE and BRINSUPRI.
Cash Flows We had cash and cash equivalents of $555.0 million as of December 31, 2024 as compared with $482.4 million as of December 31, 2023, an increase of $72.7 million.
Cash Flows We had cash and cash equivalents of $510.4 million as of December 31, 2025 as compared with $555.0 million as of December 31, 2024. In addition, as of December 31, 2025, we had marketable securities of $919.6 million as compared to $878.8 million as of December 31, 2024.
These reserves are recorded in the same period in which the revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The current liability is included in accounts payable and accrued liabilities on the consolidated balance sheets.
The current liability is included in accounts payable and accrued liabilities on the consolidated balance sheets.
The increase in cash provided by financing activities for the year ended December 31, 2024 as compared to 2023 is due to net cash proceeds received from the issuance of common stock in our underwritten offering in May 2024, proceeds from our terminated new ATM program, proceeds from the Tranche B Term Loan, and proceeds from stock options and our Employee Stock Purchase Program (ESPP).
During the years ended December 31, 2025 and 2024, net cash provided by financing activities consisted primarily of proceeds from the issuance of common stock in our underwritten public equity offerings and proceeds from the exercise of stock options and the Employee Stock Purchase Plan (ESPP).
Net cash used in investing activities was $583.2 million and $223.6 million for the years ended December 31, 2024 and 2023, respectively. The increase in cash used for investing activities for the year ended December 31, 2024 as compared to 2023 is due to the purchases of marketable securities, partially offset by maturity of certain marketable securities.
During the year ended December 31, 2025, net cash used in investing activities consisted primarily of purchases of property and equipment. During the year ended December 31, 2024, net cash used in investing activities consisted primarily of purchases of marketable securities, partially offset by maturities of marketable securities.
In December 2020, we began recognizing product revenue from commercial sales of ARIKAYCE in Europe . In July 2021, we began recognizing product revenue from commercial sales of ARIKAYCE in Japan. Globally, product revenues are recognized once we perform and satisfy all five steps of the revenue recognition criteria mentioned above.
Our customers in the US include specialty pharmacies and a specialty distributor. P roduct revenues are recognized once we perform and satisfy all five steps of the revenue recognition criteria mentioned above.
Future Funding Requirements We may need to raise additional capital to fund our operations, including the development and potential commercialization of brensocatib, continued commercialization of ARIKAYCE, current and future clinical trials related to ARIKAYCE, development of TPIP, and the potential development, acquisition, in-license or co-promotion of other products or product candidates, including those that address orphan or serious diseases.
While we believe we currently have sufficient funds to meet our financial needs for at least the next 12 months, w e may raise additional capital to fund future development of our product candidates, and to develop, acquire, in-license or co-promote other products or product candidates, including those that address serious diseases with significant unmet need.
The following table summarizes revenue by geography for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, Increase (decrease) 2024 2023 $ % US $ 254,800 $ 224,195 $ 30,605 13.7% Japan 87,699 65,733 21,966 33.4% Europe and rest of world 21,208 15,280 5,928 38.8% Total product revenues, net $ 363,707 $ 305,208 $ 58,499 19.2% Product revenues, net for the year ended December 31, 2024 were $363.7 million as compared to $305.2 million for the year ended December 31, 2023, an increase of $58.5 million, or 19.2%.
The following table summarizes revenue by product and geography for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, Increase (decrease) 2025 2024 $ % ARIKAYCE US $ 280,294 $ 254,800 $ 25,494 10.0 % International 153,471 108,907 44,564 40.9 % Total $ 433,765 $ 363,707 $ 70,058 19.3 % BRINSUPRI US $ 172,658 $ — $ 172,658 NA Total $ 172,658 $ — $ 172,658 NA Total US $ 452,952 $ 254,800 $ 198,152 77.8 % International 153,471 108,907 44,564 40.9 % Total product revenues, net $ 606,423 $ 363,707 $ 242,716 66.7 % Product revenues, net for the year ended December 31, 2025 were $606.4 million as compared to $363.7 million for the year ended December 31, 2024, an increase of $242.7 million, or 66.7%.
For additional accounting policies, see Note 2 - Summary of Significant Accounting Policies in our notes to the consolidated financial statements.
See Note 2 - Summary of Significant Accounting Policies in this Annual Report on Form 10-K for our required disclosures on accounting policies and estimates.
While we believe we currently have sufficient funds to meet our financial needs for at least the next 12 months, we may opportunistically raise additional capital and may do so through equity or debt financing(s), strategic transactions or otherwise.
However, our business strategy may require us to raise additional capital at any time through equity or debt financing(s), strategic transactions or otherwise.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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If a 10% change in interest rates had occurred on December 31, 2024, it would not have had a material effect on the fair value of our debt as of that date, nor would it have a material effect on our future earnings or cash flows. The majority of our business is conducted in US dollars.
If a 10% change in interest rates had occurred on December 31, 2025, it would not have had a material effect on the fair value of our debt as of that date, nor would it have a material effect on our future earnings or cash flows. The majority of our business is conducted in US dollars.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As of December 31, 2024, our cash and cash equivalents were in cash accounts or were invested in money market funds. Our investments in money market funds are not insured by the federal government.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As of December 31, 2025, our cash and cash equivalents were in cash accounts or were invested in money market funds. Our investments in money market funds are not insured by the federal government.
However, we do conduct certain transactions in other currencies, including Euros, British Pounds and Japanese Yen. Historically, fluctuations in foreign currency exchange rates have not materially affected our results of operations. During the years ended December 31, 2024, 2023 and 2022, our results of operations were not materially affected by fluctuations in foreign currency exchange rates.
However, we do conduct certain transactions in other currencies, including Euros, British Pounds, Swiss Francs and Japanese Yen. Historically, fluctuations in foreign currency exchange rates have not materially affected our results of operations. During the years ended December 31, 2025, 2024 and 2023, our results of operations were not materially affected by fluctuations in foreign currency exchange rates.
The Royalty Financing Agreement pays interest at 4.0% of ARIKAYCE global net sales prior to September 1, 2025 and 4.5% thereafter as well as 0.75% of brensocatib global net sales, if approved.
The Royalty Financing Agreement required us to pay a Revenue Interest Payment of 4.0% of ARIKAYCE global net sales prior to September 1, 2025 and to pay 4.5% thereafter, as well as 0.75% of brensocatib global net sales, which includes BRINSUPRI.
As of December 31, 2024, our marketable securities were invested in US treasury notes with an original maturity of six months or less. As of December 31, 2024, we had $574.9 million of 2028 Convertible Notes outstanding. Our 2028 Convertible Notes bear interest at a coupon rate of 0.75%.
As of December 31, 2025, our marketable securities were invested in US treasury securities with an original maturity of six months or less. As of December 31, 2025, we had our $500.0 million Term Loans outstanding. The Term Loans accrue interest quarterly at a fixed rate of 9.6% per annum.
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In addition, as of December 31, 2024, we had our $500.0 million Term Loans outstanding. The Term Loans accrue interest quarterly at a fixed rate of 9.6% per annum.

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