MONMOUTH JUNCTION, N.J.,
Aug. 8, 2011 /PRNewswire/ -- Insmed
Incorporated (Nasdaq CM: INSM), a biopharmaceutical company, today
reported results for the second quarter and six-months ended
June 30, 2011.
Key Recent Highlights:
- Announced positive results through six cycles of data from the
open-label phase 2 study of Arikace™ (liposomal amikacin for
inhalation) in the treatment of cystic fibrosis (CF) patients with
Pseudomonas lung infections
- Added to Russell 3000, Russell 2000, Russell Global, and
Russell Microcap Indexes
- Clinical hold placed on Arikace™ phase 3 program by FDA; Insmed
to supply currently requested information and data to the Agency by
end of August; FDA's response expected within 30 days of
receipt of the Company's complete response to the Agency's
requests
"We continue to believe Arikace™ has the potential to be an
important treatment option for CF patients and those suffering from
non-tuberculous mycobacterial (NTM) lung disease based on the
efficacy and safety data generated from our phase 2 clinical trial
program," said Timothy Whitten,
Insmed's President and CEO. "We believe that we are taking
the appropriate steps with FDA to address the findings from the
interim results of our long-term rat inhalation carcinogenicity
study that led to the clinical hold. Moreover, after
reviewing the data, we believe we have a sound scientific rationale
for those findings and look forward to working closely with our
experts and with FDA to provide the Agency with all relevant
information and data required to expedite their review and
evaluation. Depending upon the timing and results of FDA's
review, we are hopeful that we can resume our phase 3 clinical
trial program for Arikace™ during the fourth quarter of 2011."
Financial Results:
For the second quarter of 2011, Insmed posted a net loss
attributable to common stockholders of $10.0
million, or $0.40 per share –
basic and diluted, compared to a net loss of 0.4 million, or
$0.03 per share – basic and diluted,
for the three months ended June 30,
2010.
Net loss attributable to common stockholders for the six-months
ended June 30, 2011 was $26.1 million, or $1.19 per common share – basic and diluted,
compared to a net loss of $0.3
million, or $0.02 per common
share – basic and diluted, for the six-months ended June 30, 2010. The net loss attributable to
common stockholders in 2011 includes the conversion of the
Series B Conditional Convertible Preferred Stock, and a
non-cash charge for the beneficial conversion feature of the
Series B Preferred Stock in the amount of $9.2 million, which increased the net loss and,
in turn, reduced our earnings per common share on a basic and
diluted basis by $0.48. The
charge represents the $1.00
difference between the conversion price of the preferred stock of
$7.10 per share and its carrying
value of $6.10 per share. The
carrying value of the preferred stock was based on its fair value
at issuance, which was estimated using the common stock price
reduced for a lack of marketability between the issuance date and
the anticipated date of conversion.
Revenues for the three-months ended June
30, 2011 were $1.0 million, as
compared to $1.9 million for the
quarter ended June 30, 2010.
The $0.9 million reduction in
revenue was primarily attributable to a year-over-year decrease in
cost recovery from Insmed's IPLEX™ Expanded Access Program (EAP) in
Europe, due to the smaller number
of patients being supplied IPLEX™.
Revenues for the six-months ended June
30, 2011 totalled $2.6
million, as compared to $3.8
million for the six-months ended June
30, 2010. The $1.2
million decrease was also primarily due to a year-over-year
decrease of $1.5 million in cost
recovery from the IPLEX™ EAP in Europe, partially offset by $0.3 million in license fees received in 2011 for
the out-licensing of patent technology related to Insmed's
CISPLATIN Lipid Complex.
Research and development (R&D) expenses were $8.7 million for the second quarter of 2011,
compared to $0.9 million in the
second quarter of 2010. The increase of $7.8 million is attributable to the full scale
R&D activities for Arikace™, including the preparation for the
initiation of the phase 3 clinical studies planned for the second
half of 2011, and the manufacturing of supply to support the
studies. General and administrative (G&A) expenses were
$2.7 million for the second quarter
of 2011, compared to $1.9 million for
the same period in 2010. The $0.8
million increase was primarily attributable to the increased
headcount associated with the administrative support for the
full-scale development of Arikace™.
Research and development expenses increased to $14.5 million in the six-months ended
June 30, 2011 from $1.5 million for the six-months ended
June 30, 2010. The increase of
$13.0 million in 2011 is also
attributable to full scale R&D of Arikace™, including the
preparation of the phase 3 studies planned for the second half of
2011 and the manufacturing of supply to support the studies.
Of note within the R&D expenses, clinical development and
regulatory expenses increased $6.6
million for the first six-months of 2011 compared to 2010 as
a result of the planning efforts for the two phase 3 CF studies and
one phase 3 NTM study. There was also a $3.0 million increase in clinical manufacturing
expenses from 2011 to 2010 attributable to the manufacturing of
Arikace™ for use in the phase 3 studies while compensation expenses
rose $2.4 million due to an increased
headcount of 12 year on year, and additionally we incurred the
final $1.0 million payment for the
recently completed rat carcinogenicity study. G&A
expenses increased to $6.0 million in the six-months ended
June 30, 2011 from $3.4 million for the six-months ended
June 30, 2010. The $2.6 million increase was due largely to the
increased finance, legal and consulting fees related to the
business combination with Transave on December 1, 2010, as well as the reverse stock
split transaction on March 2, 2011,
and the increased administrative support for the Arikace™
development program.
As of June 30, 2011, Insmed had
total cash, cash equivalents, short-term investments, and
certificate of deposits on hand totaling $94.0 million, consisting of $91.9 million in cash and short-term investments
and $2.1 million in a certificate of
deposit, as compared to $110.2
million of cash on hand as of December 31, 2010. The $16.2 million decrease in total cash was
primarily due to the net cash used in operating activities of
$16.9 million in the first half of
2011, which was partially offset by a $0.5
million increase in payables and a $0.2 million reduction in receivables.
Conference Call
To participate in today's live conference call at 8:30 AM ET, please dial 800-901-5247 (U.S.
callers) or 617-786-4501 (international), and provide passcode
14391743. A live webcast of the call will also be available
at:
http://phx.corporate-ir.net/playerlink.zhtml?c=122332&s=wm&e=4160458.
Please allow extra time prior to the webcast to register,
download and install any necessary audio software. The
webcast will be archived for 30 days, and a telephone replay of the
call will be available for seven days, beginning at 11:30 AM ET on August
8th, at 888-286-8010 (U.S. callers) or 617-801-6888
(international), using passcode 57316274.
About Insmed
Insmed Incorporated is a biopharmaceutical company focused on
the development of innovative inhaled pharmaceuticals for the
site-specific treatment of serious lung diseases, and has a
proprietary protein platform aimed at niche markets with high unmet
medical need. Insmed's primary focus is on the development of
inhaled antibiotic therapy delivered via proprietary advanced
pulmonary liposome technology in areas of high unmet need in lung
diseases. For more information, please visit
http://www.insmed.com.
Forward-Looking Statements
This release contains forward-looking statements which are made
pursuant to provisions of Section 21E of the Securities Exchange
Act of 1934. Investors are cautioned that such statements in this
release, including statements relating to our financial position,
results of operations, the status and the results of preclinical
studies and clinical trials and preclinical and clinical data
described herein, the timing of responses to information and data
requests from FDA, the development of our products, and the
business strategies, plans and objectives of management, constitute
forward-looking statements which involve risks and uncertainties
that could cause actual results to differ materially from those
anticipated by the forward-looking statements. Our results
may be affected by such factors as the receipt and timing of FDA
and other regulatory reviews and approvals, if at all, competitive
developments affecting our product development, delays in product
development or clinical trials, and patent disputes involving
currently developing products. The risks and
uncertainties include, without limitation, we may experience
unexpected regulatory actions, delays or requests, our future
clinical trials may not be successful, we may be unsuccessful in
developing our product candidates or receiving necessary regulatory
approvals, we may experience delays in our product development or
clinical trials, our product candidates may not prove to be
commercially successful, our expenses may be higher than
anticipated and other risks and challenges detailed in our filings
with the U.S. Securities and Exchange Commission, including our
Annual Report on Form 10-K for the year ended December 31, 2010 and our Quarterly Report on
Form 10-Q for the quarter ended June 30,
2011. Investors are cautioned not to place undue
reliance on any forward-looking statements which speak only as of
the date of this release. We undertake no obligation to
publicly release the results of any revisions to these
forward-looking statements that may be made to reflect events or
circumstances that occur after the date of this release or to
reflect the occurrence of unanticipated events.
INSMED
INCORPORATED
|
|
Consolidated
Balance Sheets (Unaudited)
|
|
(in
thousands, except share and per share data)
|
|
|
|
|
|
|
June
30,
|
December
31,
|
|
|
2011
|
2010
|
|
Assets
|
|
|
|
Current assets:
|
|
|
|
Cash and cash
equivalents
|
$
9,839
|
$
10,743
|
|
Short-term
investments
|
82,123
|
97,306
|
|
Accounts receivable,
net
|
303
|
471
|
|
Prepaid
expenses
|
354
|
277
|
|
Total
current assets
|
92,619
|
108,797
|
|
|
|
|
|
Certificate of
deposit
|
2,085
|
2,176
|
|
In-process research and
development
|
77,900
|
77,900
|
|
Goodwill
|
6,290
|
6,290
|
|
Deposits
|
378
|
-
|
|
Fixed assets, net
|
1,016
|
1,102
|
|
Total
assets
|
$
180,288
|
$
196,265
|
|
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
1,921
|
$
1,450
|
|
Accrued
expenses
|
1,162
|
1,256
|
|
Deferred rent
|
150
|
150
|
|
Capital lease obligations,
current
|
64
|
81
|
|
Deferred
revenue
|
195
|
402
|
|
Total
current liabilities
|
3,492
|
3,339
|
|
|
|
|
|
Capital lease obligations,
long-term
|
58
|
83
|
|
Total
liabilities
|
3,550
|
3,422
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock; $.01 par value;
authorized shares
|
|
|
|
500,000,000; issued and
outstanding shares, 24,833,301 in 2011 and 15,653,734 in
2010
|
248
|
1,565
|
|
Preferred stock; $.01 par value;
authorized shares
|
|
|
|
200,000,000; issued and
outstanding shares, zero in 2011 and 9,174,589 in
2010
|
-
|
918
|
|
Additional paid-in
capital
|
426,795
|
423,877
|
|
Accumulated
deficit
|
(251,422)
|
(234,510)
|
|
Accumulated other
comprehensive income:
|
|
|
|
Unrealized gain on
investments
|
1,117
|
993
|
|
Total stockholders'
equity
|
176,738
|
192,843
|
|
Total
liabilities and stockholders' equity
|
$
180,288
|
$
196,265
|
|
|
|
|
|
|
INSMED
INCORPORATED
|
|
Consolidated
Statements of Operations (Unaudited)
|
|
(in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
License fees
|
$
1
|
|
$
-
|
|
$
251
|
|
$
2
|
|
Other expanded access program
income, net
|
977
|
|
1,864
|
|
2,328
|
|
3,791
|
|
Total revenues
|
978
|
|
1,864
|
|
2,579
|
|
3,793
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
8,706
|
|
893
|
|
14,467
|
|
1,535
|
|
General and
administrative
|
2,745
|
|
1,884
|
|
6,002
|
|
3,422
|
|
Total operating
expenses
|
11,451
|
|
2,777
|
|
20,469
|
|
4,957
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
(10,473)
|
|
(913)
|
|
(17,890)
|
|
(1,164)
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
459
|
|
538
|
|
987
|
|
935
|
|
Interest expense
|
(3)
|
|
-
|
|
(7)
|
|
(28)
|
|
Loss before income
taxes
|
(10,017)
|
|
(375)
|
|
(16,910)
|
|
(257)
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
-
|
|
3
|
|
2
|
|
3
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
(10,017)
|
|
(378)
|
|
(16,912)
|
|
(260)
|
|
|
|
|
|
|
|
|
|
|
Less: accretion of beneficial
conversion feature
|
-
|
|
-
|
|
(9,175)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common
stockholders
|
$ (10,017)
|
|
$
(378)
|
|
$ (26,087)
|
|
$
(260)
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss
attributable to
|
|
|
|
|
|
|
|
|
common stockholders per common
share
|
$
(0.40)
|
|
$
(0.03)
|
|
$
(1.19)
|
|
$
(0.02)
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic common
shares outstanding
|
24,830
|
|
13,025
|
|
21,838
|
|
13,023
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common
shares outstanding
|
24,830
|
|
13,025
|
|
21,838
|
|
13,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSMED
INCORPORATED
|
|
Consolidated
Statements of Cash Flows (Unaudited)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
|
|
|
2011
|
|
2010
|
|
Operating
activities
|
|
|
|
|
|
Net loss
|
|
$
(16,912)
|
|
$
(260)
|
|
Adjustments to reconcile net
(loss) to net cash (used in)
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
154
|
|
25
|
|
|
Stock based compensation
expense
|
|
652
|
|
129
|
|
|
Changes in operating assets and
liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
168
|
|
55
|
|
|
Income tax
receivable
|
|
-
|
|
2,023
|
|
|
Prepaid expenses and other
assets
|
|
(364)
|
|
(182)
|
|
|
Accounts
payable
|
|
471
|
|
600
|
|
|
Accrued
expenses
|
|
(94)
|
|
(195)
|
|
|
Deferred
revenue
|
|
(207)
|
|
40
|
|
|
Net cash (used in)
provided by operating activities
|
|
(16,132)
|
|
2,235
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
Purchase of fixed
assets
|
|
(68)
|
|
-
|
|
|
Sales of short-term
investments
|
|
16,769
|
|
69,239
|
|
|
Purchases of short-term
investments
|
|
(1,463)
|
|
(72,668)
|
|
|
Net cash provided by (used
in) investing activities
|
|
15,238
|
|
(3,429)
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
Payments on capital lease
obligations
|
|
(42)
|
|
-
|
|
|
Repayment of convertible
notes
|
|
-
|
|
(230)
|
|
|
Proceeds from issuance of common
stock
|
|
32
|
|
-
|
|
|
Net cash used in financing
activities
|
|
(10)
|
|
(230)
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash
equivalents
|
|
(904)
|
|
(1,424)
|
|
|
Cash and cash equivalents at
beginning of period
|
|
10,743
|
|
12,740
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end
of period
|
|
$
9,839
|
|
$
11,316
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash
flow information
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
7
|
|
$
3
|
|
|
Cash paid for taxes,
net
|
|
$
2
|
|
$
-
|
|
|
|
|
|
|
|
|
Supplemental disclosures of
non-cash investing and financing activities
|
|
|
|
|
|
Unrealized gain on
investments
|
|
$
124
|
|
$
602
|
|
|
Accretion of beneficial
conversion feature
|
|
$
(9,175)
|
|
$
-
|
|
|
|
|
|
|
|
|
|
Investor Relations Contact:
Brian Ritchie - FD
212-850-5683
brian.ritchie@fd.com
Media Contact:
Irma Gomez-Dib - FD
212-850-5761
irma.gomez-dib@fd.com
SOURCE Insmed Incorporated