MONMOUTH JUNCTION, N.J.,
Aug. 7, 2012 /PRNewswire/
-- Insmed Incorporated (Nasdaq CM: INSM), a biopharmaceutical
company dedicated to the development of innovative inhaled
pharmaceuticals for the treatment of serious lung infections, today
reported results for the second quarter and six-months ended
June 30, 2012.
Key Recent Highlights:
- Dosed first patient in April in CLEAR-108 phase 3 European and
Canadian registration study of ARIKACE® in patients with cystic
fibrosis who have Pseudomonas aeruginosa lung infections;
approximately 65 of 80 planned sites activated and recruiting
patients
- Dosed first patient in June in the U.S. TARGET-NTM phase 2
trial of ARIKACE in patients with non-tuberculous mycobacteria
(NTM) lung infections
- Secured $20 million term loan
from Hercules Technology Growth Capital, Inc.
- Granted second composition of matter patent for ARIKACE by U.S.
Patent and Trademark Office
"We have successfully transitioned Insmed into a phase 3
development stage company, a significant milestone in our history,"
said Timothy Whitten, President and
CEO of Insmed. "During the second quarter, Insmed made
substantial progress in advancing ARIKACE in the clinic in our two
priority orphan indications. We continue to expect top-line
data from CLEAR-108 in mid-2013 and top-line results from the
randomized part of TARGET-NTM in the fourth quarter of 2013.
In addition, we recently secured a term loan from Hercules for up
to $20 million, $10 million of which has been funded, that will
extend our cash runway well into 2014 and provide the Company with
further financial stability and flexibility."
Financial Results:
For the second quarter of 2012, Insmed posted a net loss
attributable to common stockholders of $9.7
million, or $0.39 per common
share – basic and diluted, as compared to a net loss of
$10.0 million or $0.40 per common share – basic and diluted, for
the three months ended June 30, 2011.
The $0.3 million improvement in the
net loss was due to a $1.5 million
reduction in operating expenses, which was partially offset by a
$1.0 million decline in IPLEX®
revenue and a $0.2 million reduction
in investment income.
Insmed did not record any revenues for the three months ended
June 30, 2012 as compared to
$1.0 million in revenues reported for
the three months ended June 30,
2011. The $1.0 million
decrease was due to the elimination of IPLEX EAP revenues following
the depletion of IPLEX inventory in December
2011.
Research and development expenses decreased to $7.5 million in the three months ended
June 30, 2012 from $8.7 million for the three months ended
June 30, 2011. The
decrease of $1.2 million in 2012 is
primarily attributable to a reduction of $2.9 million in development costs associated with
initiating two ARIKACE related clinical trials, as compared to the
same period in 2011, when three trials were being planned.
This includes the one-time start-up costs for each of the three
trials in 2011, which were not duplicated in 2012. This
reduction was partially offset by an increase of $1.8 million in manufacturing costs associated
primarily with initiating the nine-month dog inhalation toxicity
study and the build-up of clinical trial drug supply for the
ongoing ARIKACE CLEAR-108 and TARGET-NTM clinical studies.
General and administrative expenses of $2.5 million for the three months ended
June 30, 2012 were $0.2 million lower than the $2.7 million for the same quarter in 2011 due
mainly to a reduction in external finance and legal
fees.
Investment income for the second quarter of 2012 of $0.3 million was $0.2
million lower than the corresponding period in 2011 due to
the lower cash balance available for investment.
Net loss attributable to common stockholders for the six months
ended June 30, 2012 was $16.5 million (or $0.67 per common share – basic and diluted),
compared to net loss of $26.1 million
(or $1.19 per common share – basic
and diluted), for the six months ended June
30, 2011. The $9.6
million reduction in the net loss period on period was
primarily due to the $9.2 million
non-cash charge for the beneficial conversion feature of the Series
B Conditional Convertible Preferred Stock incurred in the first
quarter of 2011, which increased the net loss attributable to
holders of our common shares and, in turn, reduced our loss 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 Series B Conditional Convertible Preferred Stock of
$7.10 per share and its carrying
value of $6.10 per share. The
carrying value of the Series B 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. Additionally, a
reduction in operating expenses of $3.2
million was partially offset by revenue reduction of
$2.6 million and a decline in
investment income of $0.3 million in
the six months ended June 30,
2012.
Insmed did not record any revenues for the six months ended
June 30, 2012. Insmed
reported $2.6 million in revenues for
the six months ended June 30, 2011.
The $2.6 million decrease was due to
the elimination of $2.3 million of
IPLEX EAP revenues following the depletion of IPLEX inventory in
December 2011 and the receipt of
$0.3 million in license fees for our
CISPLATIN lipid complex in 2011, as compared to zero in the current
year.
Research and development expenses decreased to $12.0 million in the six months ended
June 30, 2012 from $14.5 million for the six months ended
June 30, 2011. The
decrease of $2.5 million in the six
months ended June 30, 2012 is again
attributable primarily to a reduction of $3.5 million in development costs associated with
initiating two ARIKACE related clinical trials, as compared to the
same period in 2011, when three trials were being planned.
This was also offset by an increase of $1.1 million in manufacturing costs in the six
months ended June 30, 2012 associated
with initiating the nine-month dog inhalation toxicity study and
building drug supply for the ongoing CLEAR-108 and TARGET-NTM
clinical trials.
General and administrative expenses decreased to $5.2 million in the six months ended June 30, 2012 from $6.0
million for the six months ended June
30, 2011. The $0.8
million decrease was due largely to lower finance, legal and
consulting fees incurred in the six months ended June 30, 2011 related to post Transave merger
matters and the March 2011 reverse
stock split transaction.
Investment income decreased to $0.7
million in the six months ended June
30, 2012 from $1.0 million in
the six months ended June 30, 2011.
The decrease is a result of the lower overall average cash and
short-term investments balance for the current quarter as compared
to the quarter ended June 30,
2011.
As of June 30, 2012, Insmed had
total cash, cash equivalents, short-term investments, and
certificate of deposits on hand totalling $75.2 million, consisting of $73.1 million in cash and short-term investments
and $2.1 million in a certificate of
deposit, as compared to $78.4 million
of cash on hand as of December 31,
2011. The $3.2 million decrease
in total cash was due primarily to the funding of operations,
consisting primarily of research and development activities,
totalling $12.9 million, which was
primarily offset by the net $9.7
million of funding in June
2012 under the term loan with Hercules Technology Growth
Capital.
Conference Call
To participate in today's live conference call, please dial
800-299-7089 (U.S. callers) or 617-801-9714 (international), and
provide passcode 17092264. A live webcast of the call will
also be available at
http://www.media-server.com/m/p/uk852bf4. 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 today at 10:30 AM
ET, at 1-888-286-8010 (U.S. callers) or +1-617-801-6888
(international), using passcode 11016101.
About Insmed
Insmed Incorporated is a biopharmaceutical company dedicated to
the development of innovative inhaled pharmaceuticals for the
treatment of serious lung infections, with a particular focus on
orphan diseases. Insmed's core expertise is the development
of inhaled antibiotic therapy delivered via proprietary advanced
liposomal pulmonary technology. For more information, please
visit http://www.insmed.com.
Investor Relations Contact:
Brian Ritchie – FTI
Consulting
212-850-5683
brian.ritchie@fticonsulting.com
Media Contact:
Irma Gomez-Dib – FTI Consulting
212-850-5761
irma.gomez-dib@fticonsulting.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,
our estimates regarding our capital requirements and our needs for
additional financing, our ability to access additional funds under
the Hercules loan agreement, results of operations, the status,
results and timing of results of pre-clinical studies and clinical
trials and pre-clinical and clinical data described herein, the
timing of and costs associated with pre-clinical studies and
clinical trials, the development of our products, our estimates of
the size of the potential markets for our product candidates, 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 U.S. Food and Drug Administration 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, 2011 and
our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2012. 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,
|
|
|
2012
|
|
2011
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
28,575
|
|
$
14,848
|
Short-term investments
|
|
44,560
|
|
61,424
|
Accounts receivable
|
|
-
|
|
757
|
Prepaid expenses and other current assets
|
|
715
|
|
370
|
Total current assets
|
|
73,850
|
|
77,399
|
|
|
|
|
|
Certificate of deposit
|
|
2,111
|
|
2,085
|
In-process
research and development
|
|
58,200
|
|
58,200
|
Other
|
|
133
|
|
212
|
Fixed
assets, net
|
|
1,758
|
|
1,937
|
Total assets
|
|
$
136,052
|
|
$
139,833
|
|
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
|
|
$
3,198
|
|
$
2,334
|
Accrued expenses
|
|
1,882
|
|
800
|
Accrued compensation
|
|
849
|
|
795
|
Accrued lease expense, current
|
|
288
|
|
278
|
Deferred rent
|
|
152
|
|
156
|
Capital lease obligations, current
|
|
117
|
|
114
|
Total current liabilities
|
|
6,486
|
|
4,477
|
|
|
|
|
|
Accrued
lease expense, long-term
|
|
784
|
|
923
|
Capital
lease obligations, long-term
|
|
101
|
|
166
|
Debt,
long-term
|
|
8,965
|
|
-
|
Total liabilities
|
|
16,336
|
|
5,566
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
Common
stock; $.01 par value; authorized shares
|
|
|
|
|
500,000,000; issued and outstanding
shares,
24,874,852 in 2012 and 24,833,301 in
2011
|
|
249
|
|
248
|
Additional paid-in capital
|
|
429,545
|
|
427,743
|
Accumulated deficit
|
|
(310,714)
|
|
(294,174)
|
Accumulated other comprehensive income:
|
|
|
|
|
Unrealized gain on
investments
|
|
636
|
|
450
|
Total
stockholders' equity
|
|
119,716
|
|
134,267
|
Total liabilities and stockholders' equity
|
|
$
136,052
|
|
$
139,833
|
INSMED
INCORPORATED
|
Consolidated Statements of Comprehensive
Operations (Unaudited)
|
(in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six
Months Ended
|
|
June
30,
|
|
June
30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
License
fees
|
$
-
|
|
$
1
|
|
$
-
|
|
$
251
|
Other
expanded access program income, net
|
-
|
|
977
|
|
-
|
|
2,328
|
Total revenues
|
-
|
|
978
|
|
-
|
|
2,579
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and development
|
7,527
|
|
8,706
|
|
12,014
|
|
14,467
|
General and administrative
|
2,456
|
|
2,745
|
|
5,233
|
|
6,002
|
Total operating expenses
|
9,983
|
|
11,451
|
|
17,247
|
|
20,469
|
|
|
|
|
|
|
|
|
Operating
loss
|
(9,983)
|
|
(10,473)
|
|
(17,247)
|
|
(17,890)
|
|
|
|
|
|
|
|
|
Investment
income
|
290
|
|
459
|
|
708
|
|
987
|
|
|
|
|
|
|
|
|
Interest
expense
|
(1)
|
|
(3)
|
|
(3)
|
|
(7)
|
Gain on
sale of asset, net
|
-
|
|
-
|
|
5
|
|
-
|
Loss before income taxes
|
(9,694)
|
|
(10,017)
|
|
(16,537)
|
|
(16,910)
|
|
|
|
|
|
|
|
|
Income tax
expense
|
2
|
|
-
|
|
4
|
|
2
|
|
|
|
|
|
|
|
|
Net
loss
|
(9,696)
|
|
(10,017)
|
|
(16,541)
|
|
(16,912)
|
|
|
|
|
|
|
|
|
Accretion
of beneficial conversion charge
|
-
|
|
-
|
|
-
|
|
(9,175)
|
|
|
|
|
|
|
|
|
Net
loss attributable to common
stockholders
|
$
(9,696)
|
|
$
(10,017)
|
|
$
(16,541)
|
|
$
(26,087)
|
|
|
|
|
|
|
|
|
Basic and
diluted net loss attributable to
common
stockholders per common share
|
$
(0.39)
|
|
$
(0.40)
|
|
$
(0.67)
|
|
$
(1.19)
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
$
(9,726)
|
|
$
(9,714)
|
|
$
(16,355)
|
|
$
(16,788)
|
|
|
|
|
|
|
|
|
Weighted
average basic and diluted common shares outstanding
|
24,875
|
|
24,830
|
|
24,867
|
|
21,838
|
INSMED
INCORPORATED
|
Consolidated Statements of Cash Flows
(Unaudited)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
Six
Months Ended
|
|
|
|
June
30,
|
|
|
|
2012
|
|
2011
|
Operating activities
|
|
|
|
|
Net
loss
|
|
$
(16,541)
|
|
$
(16,912)
|
Adjustments to reconcile net (loss) income to net
cash (used in)
|
|
|
|
|
provided
by operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
274
|
|
154
|
|
Stock
based compensation expense
|
|
1,013
|
|
652
|
|
Gain on
sale of asset, net
|
|
(5)
|
|
-
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
757
|
|
168
|
|
Prepaid expenses and other assets
|
|
(263)
|
|
(364)
|
|
Accounts payable
|
|
864
|
|
471
|
|
Accrued expenses
|
|
1,078
|
|
19
|
|
Accrued lease expenses
|
|
(129)
|
|
0
|
|
Accrued compensation
|
|
54
|
|
(113)
|
|
Deferred revenue
|
|
-
|
|
(207)
|
|
Net cash used in operating activities
|
|
(12,898)
|
|
(16,132)
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
Purchase of fixed assets
|
|
(95)
|
|
(68)
|
|
Proceeds from sale of asset
|
|
5
|
|
-
|
|
Sales of short-term investments
|
|
17,051
|
|
16,769
|
|
Purchases of short-term investments
|
|
-
|
|
(1,463)
|
|
Net cash provided by investing activities
|
|
16,961
|
|
15,238
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
Payments
on capital lease obligations
|
|
(62)
|
|
(42)
|
|
Proceeds
from issuance of debt net of issuance and financing
costs
|
|
9,726
|
|
-
|
|
Proceeds
from issuance of common stock
|
|
-
|
|
32
|
|
Net cash provided by (used in) financing
activities
|
|
9,664
|
|
(10)
|
|
|
|
|
|
|
Increase
in cash and cash equivalents
|
|
13,727
|
|
(904)
|
Cash and
cash equivalents at beginning of period
|
|
14,848
|
|
10,743
|
|
|
|
|
|
|
Cash and
cash equivalents at end of period
|
|
$
28,575
|
|
$
9,839
|
|
|
|
|
|
|
Supplemental disclosures of cash flow
information
|
|
|
|
|
|
Cash paid
for interest
|
|
$
3
|
|
$
7
|
|
Cash paid
for taxes, net
|
|
$
4
|
|
$
2
|
|
|
|
|
|
|
Supplemental disclosures of non-cash investing and
financing activities
|
|
|
|
|
|
Unrealized gain on investments
|
|
$
186
|
|
$
124
|
|
Accretion
of beneficial conversion charge
|
|
$
-
|
|
$
(9,175)
|
|
Fair value
of warrants in connection with debt
|
|
$
790
|
|
$
-
|
SOURCE Insmed Incorporated