Insmed Incorporated (Nasdaq:INSM), a global biopharmaceutical
company focused on the unmet needs of patients with rare diseases,
today reported financial results for the fourth quarter and full
year ended December 31, 2017 and provided a business
update.
“Last year proved to be pivotal for Insmed in our efforts toward
building a company that will transform the lives of patients living
with serious rare diseases. We are preparing for an even
greater transformation in 2018 as we anticipate the launch of what
would be the first approved inhaled therapy for the treatment of
refractory NTM lung disease caused by MAC in the United States,”
said Will Lewis, President and Chief Executive Officer of Insmed.
“The data reported from our ALIS program, together with our ongoing
regulatory and pre-commercial activities, puts us on a trajectory
to significantly help patients afflicted by this disease. We
look forward to further expanding our global reach from the U.S.
and Europe to include Japan. Having successfully completed a
public offering in January, we are in a solid financial position to
fully fund our key strategic activities, and we look forward to
sharing our progress throughout the year.”
Corporate Update
INS-212 and INS-312 Interim Results as of December
2017
In January, Insmed announced interim results from its INS-312
study, a 12-month extension study for patients who completed six
months of treatment in the INS-212 study, but did not demonstrate
culture conversion by Month 6, as well as long-term durability data
from its INS-212 study evaluating ALIS + guideline-based therapy
(GBT) vs. GBT alone in adult patients with nontuberculous
mycobacterial (NTM) lung disease caused by Mycobacterium avium
complex (MAC). Patients in either arm of the INS-212 study who did
not achieve culture conversion by Month 6 had the option to enroll
in INS-312 at Month 8.
- Sputum culture conversion results seen through December 2017 in
INS-312 for GBT non-converters who crossed over to treatment with
ALIS + GBT (28%) are consistent with sputum culture conversion
observed in top-line results from INS-212 (29%).
- INS-312 interim descriptive data demonstrate that continued
treatment with ALIS + GBT results in more patients achieving
culture conversion, with 12% of prior non-converters from INS-212
ALIS + GBT achieving culture conversion by Month 6 in INS-312.
- INS-212 interim data show that durability of culture conversion
three months off of all treatment, which the Company believes will
be the endpoint required to support full regulatory approval, is
substantially higher in ALIS + GBT (61%) vs. GBT alone (0%).
- Serious treatment emergent adverse events observed in INS-312
are similar to those seen in INS-212 and remain consistent with
those seen with the use of inhaled antibiotics. As of December
2017, the dropout rate in INS-312 is 24%.
- The Company plans to continue to monitor and evaluate patients
throughout the duration of the INS-212 study and expects to report
additional data in late 2018 or early 2019 when the INS-312 study
has completed its full 12 months and the data has been analyzed
pursuant to its statistical analysis plan as agreed with FDA.
New U.S. Patent Issued Extends ALIS Intellectual
Property Protection
Earlier this week, Insmed announced that the United States
Patent and Trademark Office issued U.S. Patent Number 9,895,385
concerning methods for treating NTM lung infections, including NTM
lung infections caused by MAC, with ALIS. The claims of the patent
relate to methods for treating MAC lung infections via
administration of ALIS to non-cystic fibrosis patients by
nebulization once daily for a defined treatment period. The
patent extends previously existing patent coverage for ALIS by
sixteen months, from January 2034 into May 2035.
Litigation Update
Insmed announces that the U.S. District Court for the District
of New Jersey granted the Company’s motion to dismiss in the 2016
securities class action lawsuit brought against the Company and
certain of its officers and directors. On February 15, 2018, the
court dismissed the lawsuit without prejudice, meaning that the
plaintiff has 30 days from the date of the order to file a second
amended complaint.
Insmed Announces Key Management Promotions
Insmed also announces the promotions of Christine Pellizzari to
the position of Chief Legal Officer from General Counsel and
Corporate Secretary, and Nicole Schaeffer to Chief People Strategy
Officer from Senior Vice President, Human Resources and Corporate
Services.
Fourth Quarter Financial Results
For the fourth quarter of 2017, Insmed reported a net
loss of $65.4 million, or $0.85 per share, compared with
a net loss of $68.4 million, or $1.10 per share, for the
fourth quarter of 2016.
Research and development expenses were $33.9
million for the fourth quarter of 2017, compared
with $54.9 million for the fourth quarter of 2016. The
decrease was primarily due to a one-time $30.0 million upfront
payment related to INS1007 in October 2016, partially offset by an
increase in expenses associated with the development of INS-1007
and higher compensation and related expenses due to an increase in
headcount, as compared to the fourth quarter of 2016.
General and administrative expenses for the fourth quarter of
2017 were $31.4 million, compared with $12.2
million for the fourth quarter of 2016. The increase was
primarily due to higher expenses related to our pre-commercial
planning activities for ALIS, a one-time payment to reduce the
royalty owed to PARI Pharma GmbH and higher compensation and
related expenses due to an increase in headcount, as compared to
the fourth quarter of 2016.
Balance Sheet and Cash Guidance
As of December 31, 2017, Insmed had cash and cash
equivalents of approximately $381.2 million and debt of
$55.0 million. These figures do not reflect the net proceeds
of $435.8 million received in January 2018 from the public offering
of $450 million of 1.75% senior convertible notes due in 2025. The
Company's operating expenses for the fourth quarter of 2017 were
$65.4 million and $188.9 million for the full year of 2017.
The cash-based operating expenses for the fourth quarter of 2017
were approximately $59.9 million and $167.9 million for the
full year of 2017. The Company intends to repay the existing
debt from Hercules Capital on February 28, 2018. The total
payment including the backend fee and early prepayment penalty will
be approximately $58 million.
The Company is investing in the following key activities in
2018: (i) the build-out of the commercial organization to support
global expansion activities for ALIS, (ii) manufacturing of
commercial inventory and build out of an additional third-party
manufacturing facility and (iii) clinical activities for ALIS and
the phase 2 development program for INS-1007, along with
advancement of other pipeline programs. As a result of these
activities, Insmed expects cash based operating expenses and
capital and other cash investments to be in the range of $145
million to $165 million for the first half of 2018.
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 9066979. The call will also be
webcast live 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 March 2, 2018 by dialing
(855) 859-2056 (domestic) or (404) 537-3406 (international) and
referencing conference ID number 9066979. 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 NTM Lung Disease
NTM lung disease is a rare and serious disorder associated with
increased rates of morbidity and mortality. There is an increasing
prevalence of lung disease caused by NTM, and we believe it is an
emerging public health concern worldwide. Patients with NTM lung
disease may experience a multitude of symptoms such as fever,
weight loss, cough, lack of appetite, night sweats, blood in the
sputum, and fatigue. Patients with NTM lung disease frequently
require lengthy hospital stays to manage their condition. We
are not aware of any approved inhaled therapies specifically
indicated for refractory NTM lung disease caused by MAC in North
America, Japan or Europe. Current guideline-based approaches
involve use of multi-drug regimens not approved for the treatment
of NTM lung disease, and treatment can be as long as two years or
more.
The prevalence of human disease attributable to NTM has
increased over the past two decades. In a decade long study (1997
to 2007), researchers found that the prevalence of NTM lung disease
in the U.S. was increasing at approximately 8% per year and that
NTM patients on Medicare over the age of 65 were 40% more likely to
die over the period of the study than those who did not have the
disease. In the U.S., we estimate there will be between 75,000 and
105,000 patients with diagnosed NTM lung disease in 2018, of which
we expect 40,000 to 50,000 will be treated for NTM lung disease
caused by MAC. We expect that between 10,000 and 15,000 of
these patients will be refractory to treatment. In Japan, we
estimate there will be between 125,000 and 145,000 patients with
diagnosed NTM lung disease in 2018, with approximately 60,000 to
70,000 of those patients being treated for NTM lung disease caused
by MAC and 15,000 to 18,000 of these treated patients being
refractory to treatment. We also estimate there will be
approximately 14,000 patients with diagnosed NTM lung disease in
the EU5 (comprised of France, Germany, Italy, Spain and the United
Kingdom) in 2018, of which we estimate approximately 4,400 will be
treated for NTM lung disease caused by MAC and approximately 1,400
of these treated patients will be refractory to
treatment.
About ALIS
ALIS is a novel, inhaled, once-daily formulation of amikacin
that is in late-stage clinical development for adult patients with
treatment-refractory NTM lung disease caused by MAC. Amikacin
solution for parenteral administration is an established drug that
has activity against a variety of NTM; however, its use is limited
by the need to administer it intravenously and by toxicity to
hearing, balance, and kidney function. Insmed's advanced pulmonary
liposome technology uses charge neutral liposomes to deliver
amikacin directly to the lung where it is taken up by the lung
macrophages where the NTM infection resides. This prolongs the
release of amikacin in the lungs while minimizing systemic exposure
thereby offering the potential for decreased systemic toxicities.
ALIS’s ability to deliver high levels of amikacin directly to the
lung distinguishes it from intravenous amikacin. ALIS is
administered once daily using an optimized, investigational eFlow®
Nebulizer System manufactured by PARI Pharma GmbH (PARI), a
portable aerosol delivery system.
About CONVERT (INS-212) and INS-312
CONVERT is a randomized, open-label, global Phase 3 trial
designed to confirm the culture conversion results seen in Insmed’s
Phase 2 clinical trial of ALIS in patients with refractory NTM lung
disease caused by MAC. CONVERT is being conducted in 18 countries
at more than 125 sites. The primary efficacy endpoint is the
proportion of patients who achieve culture conversion at Month 6 in
the ALIS plus GBT arm compared to the GBT-only arm. Patients who
achieve culture conversion by Month 6 will continue in the CONVERT
study for an additional 12 months of treatment following the first
monthly negative sputum culture. Patients who do not culture
convert have the option of enrolling in our INS-312 study. INS-312
is a single-arm open-label extension study for patients who
completed six months of treatment in the INS-212 study, but did not
demonstrate culture conversion by Month 6. Under the study
protocol, patients in the ALIS plus GBT arm of the INS-212 study
will receive an additional 12 months of ALIS plus GBT. Patients who
crossed over from the GBT-only arm of the INS-212 study will
receive 12 months of treatment of ALIS + GBT.
About Insmed
Insmed Incorporated is a global biopharmaceutical Company
focused on the unmet needs of patients with rare diseases. The
Company’s lead product candidate is ALIS, which is in late-state
development for adult patients with treatment refractory NTM lung
disease caused by MAC, which is a rare and often chronic infection
that is capable of causing irreversible lung damage and can be
fatal. Insmed's earlier-stage clinical pipeline includes
INS1007, a novel oral reversible inhibitor of dipeptidyl peptidase
1 with therapeutic potential in non-cystic fibrosis bronchiectasis
and other inflammatory diseases, 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. For more
information, visit www.insmed.com.
Forward-looking Statements
This press release contains forward-looking statements that
involve substantial risks and uncertainties. "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
risks, uncertainties and other factors include, among others, the
following: risks that the full six-month data from the INS-212
study or subsequent data from the remainder of the study’s
treatment and off-treatment phases will not be consistent with the
top-line six-month results of the study; uncertainties in the
research and development of the Company’s existing product
candidates, including due to delays in data readouts, such as the
full data from the INS-212 study, patient enrollment and retention
or failure of the Company’s preclinical studies or clinical trials
to satisfy pre-established endpoints, including secondary endpoints
in the INS-212 study and endpoints in the INS-212 extension study
(the 312 study); risks that subsequent data from the 312 study will
not be consistent with the interim results; failure to obtain, or
delays in obtaining, regulatory approval from the U.S. Food and
Drug Administration, Japan’s Ministry of Health, Labour and
Welfare, Japan’s Pharmaceuticals and Medical Devices Agency, the
European Medicines Agency, and other regulatory authorities for the
Company’s product candidates or their delivery devices, such as the
eFlow Nebulizer System, including due to insufficient clinical
data, selection of endpoints that are not satisfactory to
regulators, complexity in the review process for combination
products or inadequate or delayed data from a human factors study
required for U.S. regulatory approval; failure to maintain
regulatory approval for the Company’s product candidates, if
received, due to a failure to satisfy post-approval regulatory
requirements, such as the submission of sufficient data from
confirmatory clinical studies; safety and efficacy concerns related
to the Company’s product candidates; lack of experience in
conducting and managing preclinical development activities and
clinical trials necessary for regulatory approval, including the
regulatory filing and review process; failure to comply with
extensive post-approval regulatory requirements or imposition of
significant post-approval restrictions on the Company’s product
candidates by regulators; uncertainties in the rate and degree of
market acceptance of product candidates, if approved; inability to
create an effective direct sales and marketing infrastructure or to
partner with third parties that offer such an infrastructure for
distribution of the Company’s product candidates, if approved;
inaccuracies in the Company’s estimates of the size of the
potential markets for the Company’s product candidates or
limitations by regulators on the proposed treatment population for
the Company’s product candidates; failure of third parties on which
the Company is dependent to conduct the Company’s clinical trials,
to manufacture sufficient quantities of the Company’s product
candidates for clinical or commercial needs, including the
Company’s raw materials suppliers, or to comply with the Company’s
agreements or laws and regulations that impact the Company’s
business; inaccurate estimates regarding the Company’s future
capital requirements, including those necessary to fund the
Company’s ongoing clinical development, regulatory and
commercialization efforts as well as milestone payments or
royalties owed to third parties; failure to develop, or to license
for development, additional product candidates, including a failure
to attract experienced third-party collaborators; uncertainties in
the timing, scope and rate of reimbursement for the Company’s
product candidates; changes in laws and regulations applicable to
the Company’s business and failure to comply with such laws and
regulations; inability to repay the Company’s existing indebtedness
or to obtain additional capital when needed on desirable terms or
at all; failure to obtain, protect and enforce the Company’s
patents and other intellectual property and costs associated with
litigation or other proceedings related to such matters;
restrictions imposed on the Company by license agreements that are
critical for the Company’s product development, including the
Company’s license agreements with PARI Pharma GmbH and AstraZeneca
AB, and failure to comply with the Company’s obligations under such
agreements; competitive developments affecting the Company’s
product candidates and potential exclusivity related thereto; the
cost and potential reputational damage resulting from litigation to
which the Company is or may be a party, including, without
limitation, the class action lawsuit against the Company that
recently was dismissed without prejudice; loss of key personnel;
and lack of experience operating internationally.
The Company may not actually achieve the results, plans,
intentions or expectations indicated by the Company’s
forward-looking statements because, by their nature,
forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that may or may
not occur in the future. For additional information about the risks
and uncertainties that may affect the Company’s 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, 2017 and any subsequent filings with the Securities and
Exchange Commission.
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
to Follow
INSMED INCORPORATED |
Consolidated Balance Sheets |
(in thousands, except par value and share
data) |
|
|
|
|
|
|
|
As of |
|
As of |
|
|
December 31, 2017 |
|
December 31, 2016 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
381,165 |
|
|
$ |
162,591 |
|
Prepaid
expenses and other current assets |
|
|
8,279 |
|
|
|
5,816 |
|
Total
current assets |
|
|
389,444 |
|
|
|
168,407 |
|
|
|
|
|
|
In-process research and
development |
|
|
58,200 |
|
|
|
58,200 |
|
Fixed assets, net |
|
|
12,432 |
|
|
|
10,020 |
|
Other assets |
|
|
1,971 |
|
|
|
1,329 |
|
Total
assets |
|
$ |
462,047 |
|
|
$ |
237,956 |
|
|
|
|
|
|
Liabilities and
shareholders' equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
14,671 |
|
|
$ |
10,439 |
|
Accrued
expenses |
|
|
29,339 |
|
|
|
16,822 |
|
Other
current liabilities |
|
|
646 |
|
|
|
728 |
|
Total
current liabilities |
|
|
44,656 |
|
|
|
27,989 |
|
|
|
|
|
|
Debt, long-term |
|
|
55,567 |
|
|
|
54,791 |
|
Other long-term
liabilities |
|
|
765 |
|
|
|
693 |
|
Total
liabilities |
|
|
100,988 |
|
|
|
83,473 |
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
Common
stock, $0.01 par value; 500,000,000 authorized shares, 76,610,508
and 62,019,889 issued and outstanding shares at December 31, 2017
and December 31, 2016, respectively |
|
|
766 |
|
|
|
620 |
|
Additional paid-in capital |
|
|
1,318,181 |
|
|
|
919,164 |
|
Accumulated deficit |
|
|
(957,885 |
) |
|
|
(765,236 |
) |
Accumulated other comprehensive loss |
|
|
(3 |
) |
|
|
(65 |
) |
Total shareholders'
equity |
|
|
361,059 |
|
|
|
154,483 |
|
Total
liabilities and shareholders' equity |
|
$ |
462,047 |
|
|
$ |
237,956 |
|
|
|
|
|
|
|
|
INSMED INCORPORATED |
|
Consolidated Statements of Net
Loss |
|
(in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
EndedDecember 31, |
|
Years EndedDecember 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
(Unaudited) |
|
|
|
|
|
Revenues |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research
and development |
|
33,949 |
|
|
|
54,870 |
|
|
|
109,749 |
|
|
|
122,721 |
|
|
General
and administrative |
|
31,404 |
|
|
|
12,181 |
|
|
|
79,171 |
|
|
|
50,679 |
|
|
Total
operating expenses |
|
65,353 |
|
|
|
67,051 |
|
|
|
188,920 |
|
|
|
173,400 |
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(65,353 |
) |
|
|
(67,051 |
) |
|
|
(188,920 |
) |
|
|
(173,400 |
) |
|
|
|
|
|
|
|
|
|
|
Investment income |
|
975 |
|
|
|
132 |
|
|
|
1,624 |
|
|
|
604 |
|
|
Interest expense |
|
(1,466 |
) |
|
|
(1,483 |
) |
|
|
(5,925 |
) |
|
|
(3,498 |
) |
|
Other income, net |
|
94 |
|
|
|
27 |
|
|
|
300 |
|
|
|
119 |
|
|
Loss
before income taxes |
|
(65,750 |
) |
|
|
(68,375 |
) |
|
|
(192,921 |
) |
|
|
(176,175 |
) |
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
provision |
|
(366 |
) |
|
|
27 |
|
|
|
(272 |
) |
|
|
98 |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(65,384 |
) |
|
$ |
(68,402 |
) |
|
$ |
(192,649 |
) |
|
$ |
(176,273 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share |
$ |
(0.85 |
) |
|
$ |
(1.10 |
) |
|
$ |
(2.89 |
) |
|
$ |
(2.85 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average basic
and diluted common shares outstanding |
|
76,596 |
|
|
|
61,955 |
|
|
|
66,576 |
|
|
|
61,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
INSMED INCORPORATED |
|
Reconciliation of GAAP to Non-GAAP
Results |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
EndedDecember 31, |
|
Years EndedDecember 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses reconciliation: |
|
|
|
|
|
|
|
|
Total operating
expenses - GAAP |
$ |
65,353 |
|
|
$ |
67,051 |
|
|
$ |
188,920 |
|
|
$ |
173,400 |
|
|
Stock-based
compensation expense |
|
(4,741 |
) |
|
|
(4,160 |
) |
|
|
(18,073 |
) |
|
|
(18,039 |
) |
|
Depreciation |
|
(733 |
) |
|
|
(682 |
) |
|
|
(2,901 |
) |
|
|
(2,438 |
) |
|
Cash-based operating expenses - Non-GAAP |
$ |
59,879 |
|
|
$ |
62,209 |
|
|
$ |
167,946 |
|
|
$ |
152,923 |
|
|
|
|
|
|
|
|
|
|
|
Contact:
Blaine Davis Insmed Incorporated (908) 947-2841
blaine.davis@insmed.com
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