Insmed Incorporated (Nasdaq:INSM), a global
biopharmaceutical company focused on the unmet needs of patients
with rare diseases, today reported financial results for the second
quarter ended June 30, 2017 and provided a business
update.
Business Update
- On track to report top-line results from phase 3
CONVERT study in September plus or minus one month.
The CONVERT study, or INS-212, is evaluating amikacin liposome
inhalation suspension (ALIS) in treatment refractory NTM lung
disease caused by MAC. The primary efficacy endpoint is the
proportion of subjects who achieve culture conversion at Month 6 in
the ALIS plus multi-drug regimen arm compared to the multi-drug
regimen without ALIS arm. The Company reported that the last
patient in the study has progressed beyond the Month 6 measure.
Additionally, Insmed reported that the dropout rate observed in the
study was lower than the initially assumed dropout rate.
- Plan to initiate enrollment of phase 2 dose-ranging
study of INS1007 in non-cystic fibrosis (non-CF)
bronchiectasis in the second half of
2017. INS1007 is a small molecule, oral, reversible
inhibitor of dipeptidyl peptidase I (DPP1), an enzyme responsible
for activating neutrophil serine proteases in neutrophils when they
are formed in the bone marrow. Pending dialogue with the FDA,
Insmed plans to evaluate two doses of INS1007 (10mg and 25mg) vs.
placebo over 24 weeks. The primary endpoint is expected to evaluate
time to first exacerbation while secondary endpoints are expected
to evaluate mechanistic, clinical and outcomes-based measures.
Insmed is also evaluating the potential of INS1007 in other
indications.
- The FDA provides established name for lead development
program. The FDA recently advised Insmed that the
established name for its phase 3 product candidate in development
for the treatment of refractory nontuberculous mycobacteria (NTM)
lung disease caused by Mycobacterium avium complex (MAC) will be
amikacin liposome inhalation suspension, or ALIS.
- Enhanced management team with appointment of chief
financial officer, chief medical officer and chief product strategy
officer. During the second quarter the company
announced changes to its senior leadership team with the
appointment of Paolo Tombesi as chief financial officer and Paul
Streck, M.D., as chief medical officer. Additionally, Eugene
Sullivan, M.D., assumed the newly created role of chief product
strategy officer.
"Throughout 2017 we have remained committed to our mission of
transforming the lives of patients with rare diseases. We
continue to focus on the execution and evaluation of our phase 3
CONVERT study for which we continue to anticipate top-line results
in September plus or minus one month. If the study meets the
primary endpoint, we intend to complete preparation for a U.S.
regulatory filing with the FDA, under Subpart H, for the treatment
of patients with refractory NTM,” said Will Lewis, president
and chief executive officer of Insmed. “Our
pre-commercialization activities are also accelerating, as is our
assessment of the regulatory pathway beyond the U.S. with a
particular focus on Japan. We are also moving ahead with our
planning for life cycle management for ALIS and advancing our
pipeline.”
Second Quarter Financial Results
For the second quarter of 2017, Insmed reported a net
loss of $44.7 million, or $0.72 per share, compared
with a net loss of $36.6 million, or $0.59 per
share, for the second quarter of 2016.
Research and development expenses were $26.9
million for the second quarter of 2017, compared
with $23.9 million for the second quarter of 2016. The
increase was primarily due to an increase in expenses related to
INS1007 and higher compensation and related expenses due to an
increase in headcount partially offset by decreases in ALIS
manufacturing expenses.
General and administrative expenses for the second quarter of
2017 were $16.6 million, compared with $12.3
million for the second quarter of 2016. The increase was
primarily due to higher expenses related to our pre-commercial
planning activities for ALIS and higher compensation and related
expenses due to an increase in headcount, as compared to the prior
year period.
Balance Sheet and Other Financial
Highlights
As of June 30, 2017, Insmed had cash and cash
equivalents of approximately $91 million. The Company's
operating expenses for the second quarter of 2017 were
approximately $44 million, and its cash-based operating expenses
(as defined below) for the second quarter of 2017 were
approximately $38 million. Insmed ended the second
quarter of 2017 with approximately $55 million in
debt.
Conference Call
Insmed will host a conference call beginning today
at 8:30 AM Eastern Time. Shareholders and other interested
parties may participate in the conference call by dialing (844)
707-0669 (domestic) or (703) 639-1223 (international) and
referencing conference ID number 53207980. The call will also be
webcast live on the internet on the Company's website
at www.insmed.com.
A replay of the conference call will be accessible approximately
two hours after its completion through August 17, 2017 by
dialing (855) 859-2056 (domestic) or (404) 537-3406 (international)
and referencing conference ID number 53207980. A webcast of the
call will also be archived for 90 days under the Investor Relations
section of the Company's website at www.insmed.com.
Non-GAAP Financial Measures
In addition to the United States generally accepted accounting
principles (GAAP) results, this earnings release includes
cash-based operating expenses, a non-GAAP financial measure, which
Insmed defines as total operating expenses excluding stock-based
compensation expense and depreciation expense. A reconciliation of
this non-GAAP financial measure to its most directly comparable
GAAP financial measure is presented in the table attached to this
press release.
Management believes that this non-GAAP financial measure is
useful to both management and investors in analyzing our ongoing
business and operating performance. Management believes that
providing non-GAAP information to investors, in addition to the
GAAP presentation, allows investors to view our financial results
in the way that management views financial results.
Management does not intend the presentation of this non-GAAP
financial measure to be considered in isolation or as a substitute
for results prepared in accordance with GAAP. In addition, this
non-GAAP financial measure may differ from similarly named measures
used by other companies.
About Insmed
Insmed Incorporated is a global biopharmaceutical company
focused on the unmet needs of patients with rare diseases. The
Company is advancing a global phase 3 clinical study of amikacin
liposome inhalation suspension (ALIS) for adult patients with
treatment refractory NTM lung disease caused by MAC, a rare and
often chronic infection that is capable of causing irreversible
lung damage and can be fatal. There are currently no approved
inhaled products specifically indicated for the treatment of
refractory NTM lung infections caused by MAC in the United
States or European Union (EU). Insmed's
earlier-stage clinical pipeline includes INS1007, a novel oral
reversible inhibitor of DPP1 with therapeutic potential in non-CF
bronchiectasis, and INS1009, an inhaled nanoparticle
formulation of a treprostinil prodrug that may offer a
differentiated product profile for rare pulmonary disorders,
including pulmonary arterial hypertension (PAH). For more
information, visit www.insmed.com.
"Insmed" is the Company's trademark. All other trademarks, trade
names or service marks appearing in this press release are the
property of their respective owners.
Forward-looking statements
This press release contains forward looking
statements. "Forward-looking statements," as that term is
defined in the Private Securities Litigation Reform Act of 1995,
are statements that are not historical facts and involve a number
of risks and uncertainties. Words herein such as "may,"
"will," "should," "could," "would," "expects," "plans,"
"anticipates," "believes," "estimates," "projects," "predicts,"
"intends," "potential," "continues," and similar expressions (as
well as other words or expressions referencing future events,
conditions or circumstances) may identify forward-looking
statements.
The forward-looking statements in this press release are based
upon the Company's current expectations and beliefs, and involve
known and unknown risks, uncertainties and other factors, which may
cause the Company’s actual results, performance and achievements
and the timing of certain events to differ materially from the
results, performance, achievements or timing discussed, projected,
anticipated or indicated in any forward-looking statements. Such
factors include, among others: uncertainties in the research and
development of our existing product candidates, including due to
delays in patient enrollment or failure of our preclinical studies
or clinical trials to satisfy pre-established endpoints; failure to
develop, or to license for development, additional product
candidates, including a failure to attract experienced third party
collaborators; failure to obtain, or delays in obtaining,
regulatory approval from the United States Food and Drug
Administration, Japan’s Pharmaceuticals and Medical Devices Agency,
the European Medicines Agency, and other regulatory authorities for
our product candidates or their delivery devices, including due to
insufficient clinical data or selection of endpoints that are not
satisfactory to regulators; failure of third parties on which we
are dependent to conduct our clinical trials and to manufacture
sufficient quantities of our product candidates for clinical or
commercial needs; failure to comply with license agreements that
are critical for our product development, including our license
agreements with PARI Pharma GmbH and AstraZeneca AB; lack of safety
and efficacy of our product candidates; inaccuracies in our
estimate of the size of the potential markets for our product
candidates; failure to maintain regulatory approval for our product
candidates, once received, due to a failure to satisfy
post-approval regulatory requirements, such as the need for
post-clinical trials; uncertainties in the rate and degree of
market acceptance of product candidates, if approved; uncertainties
in the timing, scope and rate of reimbursement for our product
candidates; competitive developments affecting our product
candidates; inaccurate estimates regarding our future capital
requirements, including those necessary to fund milestone payments
or royalties owed to third parties; inability to repay our existing
indebtedness or to obtain additional financing when needed; failure
to obtain, protect and enforce our patents and other intellectual
property; inability to create an effective direct sales and
marketing infrastructure or to partner with a third party that
offers such an infrastructure for distribution of our product
candidates; the cost and potential reputational damage resulting
from litigation to which we are a party, including, without
limitation, the class action lawsuit pending against us; failure to
comply with the laws and regulations that impact our business; loss
of key personnel; and changes in laws and regulations applicable to
our business, including those related to pricing and reimbursement
of our product candidates. For additional information about
the risks and uncertainties that may affect our business, please
see the factors discussed in Item 1A, “Risk Factors,” in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2016.
The Company cautions readers not to place undue reliance on any
such forward-looking statements, which speak only as of the date of
this press release. The Company disclaims any obligation,
except as specifically required by law and the rules of
the Securities and Exchange Commission, to publicly update or
revise any such statements to reflect any change in expectations or
in events, conditions or circumstances on which any such statements
may be based, or that may affect the likelihood that actual results
will differ from those set forth in the forward-looking
statements.
Financial Statements and Reconciliation
Follow
|
INSMED INCORPORATED |
|
|
Consolidated Statements of Net
Loss |
|
|
(in thousands, except per share
data) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research
and development |
|
26,871 |
|
|
|
23,871 |
|
|
|
49,125 |
|
|
|
44,418 |
|
|
|
General
and administrative |
|
16,644 |
|
|
|
12,262 |
|
|
|
30,359 |
|
|
|
24,782 |
|
|
|
Total
operating expenses |
|
43,515 |
|
|
|
36,133 |
|
|
|
79,484 |
|
|
|
69,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(43,515 |
) |
|
|
(36,133 |
) |
|
|
(79,484 |
) |
|
|
(69,200 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Investment income |
|
169 |
|
|
|
164 |
|
|
|
323 |
|
|
|
334 |
|
|
|
Interest expense |
|
(1,489 |
) |
|
|
(624 |
) |
|
|
(2,963 |
) |
|
|
(1,246 |
) |
|
|
Other income, net |
|
200 |
|
|
|
32 |
|
|
|
105 |
|
|
|
47 |
|
|
|
Loss
before income taxes |
|
(44,635 |
) |
|
|
(36,561 |
) |
|
|
(82,019 |
) |
|
|
(70,065 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision |
|
37 |
|
|
|
18 |
|
|
|
67 |
|
|
|
46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(44,672 |
) |
|
$ |
(36,579 |
) |
|
$ |
(82,086 |
) |
|
$ |
(70,111 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share |
$ |
(0.72 |
) |
|
$ |
(0.59 |
) |
|
$ |
(1.32 |
) |
|
$ |
(1.13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic
and diluted common shares outstanding |
|
62,209 |
|
|
|
61,878 |
|
|
|
62,126 |
|
|
|
61,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
INSMED INCORPORATED |
|
Consolidated Balance Sheets |
|
(in thousands, except par value and share
data) |
|
|
|
|
|
|
|
|
|
As of |
|
As of |
|
|
|
June 30, 2017 |
|
December 31, 2016 |
|
|
|
(Unaudited) |
|
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
91,064 |
|
|
$ |
162,591 |
|
|
Prepaid
expenses and other current assets |
|
|
5,470 |
|
|
|
5,816 |
|
|
Total
current assets |
|
|
96,534 |
|
|
|
168,407 |
|
|
|
|
|
|
|
|
In-process research and
development |
|
|
58,200 |
|
|
|
58,200 |
|
|
Fixed assets, net |
|
|
9,234 |
|
|
|
10,020 |
|
|
Other assets |
|
|
1,672 |
|
|
|
1,329 |
|
|
Total
assets |
|
$ |
165,640 |
|
|
$ |
237,956 |
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts
payable |
|
$ |
11,030 |
|
|
$ |
10,439 |
|
|
Accrued
expenses |
|
|
14,548 |
|
|
|
16,822 |
|
|
Other
current liabilities |
|
|
694 |
|
|
|
728 |
|
|
Total
current liabilities |
|
|
26,272 |
|
|
|
27,989 |
|
|
|
|
|
|
|
|
Debt, long-term |
|
|
55,194 |
|
|
|
54,791 |
|
|
Other long-term
liabilities |
|
|
729 |
|
|
|
693 |
|
|
Total
liabilities |
|
|
82,195 |
|
|
|
83,473 |
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
|
Common
stock, $0.01 par value; 500,000,000 authorized shares, |
|
|
|
|
|
62,376,416 and 62,019,889 issued and outstanding shares at June 30,
2017 and December 31, 2016, respectively |
|
|
624 |
|
|
|
620 |
|
|
Additional paid-in capital |
|
|
930,185 |
|
|
|
919,164 |
|
|
Accumulated deficit |
|
|
(847,322 |
) |
|
|
(765,236 |
) |
|
Accumulated other comprehensive loss |
|
|
(42 |
) |
|
|
(65 |
) |
|
Total shareholders'
equity |
|
|
83,445 |
|
|
|
154,483 |
|
|
Total
liabilities and shareholders' equity |
|
$ |
165,640 |
|
|
$ |
237,956 |
|
|
|
|
|
|
|
|
INSMED INCORPORATED |
|
|
Reconciliation of GAAP to Non-GAAP
Results |
|
|
(in thousands) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses reconciliation: |
|
|
|
|
|
|
|
|
|
Total operating
expenses - GAAP |
$ |
43,515 |
|
|
$ |
36,133 |
|
|
$ |
79,484 |
|
|
$ |
69,200 |
|
|
|
Stock-based
compensation expense |
|
(4,559 |
) |
|
|
(4,615 |
) |
|
|
(8,591 |
) |
|
|
(8,834 |
) |
|
|
Depreciation |
|
(738 |
) |
|
|
(568 |
) |
|
|
(1,454 |
) |
|
|
(1,082 |
) |
|
|
Cash-based operating expenses - Non-GAAP |
$ |
38,218 |
|
|
$ |
30,950 |
|
|
$ |
69,439 |
|
|
$ |
59,284 |
|
|
|
|
|
|
|
|
|
|
|
|
Investor Contact:
Blaine Davis
Vice President, Head of Investor Relations
Insmed Incorporated
(908) 947-2841
blaine.davis@insmed.com
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