Insmed Incorporated (Nasdaq:INSM), a global biopharmaceutical
company focused on the unmet needs of patients with rare diseases,
today reported financial results for the first quarter
ended March 31, 2018 and provided a business update.
“We have built significant momentum since the start of 2018
which we expect to accelerate throughout the year, as we continue
preparations for the potential launch of 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. “With the filing of our NDA for ALIS
completed at the end of March, we continue our planning for a
potential product launch in the United States early in the fourth
quarter and look forward to collaborating with the FDA throughout
the regulatory review process. We also continue our global
expansion efforts and are making strong progress in building out
the infrastructure for Japan. We are also actively planning for
additional studies to further support life cycle management
opportunities for ALIS over the long term.”
Recent Corporate Developments
On March 29, 2018 Insmed announced the submission of its New
Drug Application (NDA) for ALIS to the U.S. Food and Drug
Administration (FDA) for adult patients with Nontuberculous
Mycobacterial (NTM) lung disease caused by Mycobacterium avium
complex (MAC). The Company anticipates receiving a six-month
Priority Review and that the NDA will be reviewed by the Division
of Anti-Infective Products. The FDA will have 60 days from
the filing date to review the submission of the NDA to determine if
it is complete and acceptable for filing. The FDA has
previously designated ALIS as an orphan drug, a breakthrough
therapy and a Qualified Infectious Disease Product (QIDP) under the
Generating Antibiotic Incentives Now (GAIN) Act.
First Quarter Financial Results
For the first quarter of 2018, Insmed reported a net
loss of $68.5 million, or $0.89 per share, compared with
a net loss of $37.4 million, or $0.60 per share, for the
first quarter of 2017.
Research and development expenses were $30.1
million for the first quarter of 2018, compared
with $22.3 million for the first quarter of 2017. The
increase as compared to the first quarter of 2017 was primarily due
to an increase in external manufacturing expenses from an increase
in ALIS production-related activities and higher compensation and
related expenses due to an increase in headcount.
General and administrative expenses for the first quarter of
2018 were $32.7 million, compared with $13.7
million for the first quarter of 2017. 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 first
quarter of 2017.
Balance Sheet and Cash Guidance
As of March 31, 2018, Insmed had cash and cash
equivalents of $686.6 million. The Company's operating
expenses for the first quarter of 2018 were $62.8 million.
The cash-based operating expenses for the first quarter of 2018
were $56.3 million. During the first quarter of 2018, the
Company issued $450 million in aggregate principal amount of 1.75%
convertible senior notes due 2025 and repaid the outstanding debt
to Hercules Capital. The total payment including the backend
fee, outstanding interest and early prepayment penalty was
approximately $58.2 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 continues to expect 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 4567628. 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 May 9, 2018 by dialing (855)
859-2056 (domestic) or (404) 537-3406 (international) and
referencing conference ID number 4567628. 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 Insmed believes 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.
Insmed is 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., Insmed estimates there will be between 75,000
and 105,000 patients with diagnosed NTM lung disease in 2018, of
which the Company expects 40,000 to 50,000 will be treated for NTM
lung disease caused by MAC. Insmed expects that between
10,000 and 15,000 of these patients will be refractory to
treatment. In Japan, Insmed estimates 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. Insmed also
estimates 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 the
Company estimates 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 achieved culture conversion at Month 6
in the ALIS plus GBT arm compared to the GBT-only arm. Patients who
achieved culture conversion by Month 6 are continuing in the
CONVERT study for an additional 12 months of treatment following
the first monthly negative sputum culture. Patients who did not
culture convert may have been eligible to enroll 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, non-converting 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
plus 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 data from the remainder of the treatment
and off-treatment phases of INS-212 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 INS-312 study); risks that subsequent data from the INS-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,; 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 |
|
|
|
|
March 31, 2018 |
|
December 31, 2017 |
|
|
|
|
(Unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
686,581 |
|
|
$ |
381,165 |
|
|
|
Prepaid
expenses and other current assets |
|
|
9,832 |
|
|
|
8,279 |
|
|
|
Total
current assets |
|
|
696,413 |
|
|
|
389,444 |
|
|
|
|
|
|
|
|
|
|
In-process research and
development |
|
|
58,200 |
|
|
|
58,200 |
|
|
|
Fixed assets, net |
|
|
15,816 |
|
|
|
12,432 |
|
|
|
Other assets |
|
|
2,724 |
|
|
|
1,971 |
|
|
|
Total
assets |
|
$ |
773,153 |
|
|
$ |
462,047 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
$ |
13,176 |
|
|
$ |
14,671 |
|
|
|
Accrued
expenses |
|
|
21,074 |
|
|
|
29,339 |
|
|
|
Other
current liabilities |
|
|
556 |
|
|
|
646 |
|
|
|
Total
current liabilities |
|
|
34,806 |
|
|
|
44,656 |
|
|
|
|
|
|
|
|
|
|
Long-term debt,
net |
|
|
302,706 |
|
|
|
55,567 |
|
|
|
Other long-term
liabilities |
|
|
785 |
|
|
|
765 |
|
|
|
Total
liabilities |
|
|
338,297 |
|
|
|
100,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
|
|
Common
stock, $0.01 par value; 500,000,000 |
|
|
|
|
|
|
authorized shares, 76,623,136 and 76,610,508 issued and outstanding
shares at March 31, 2018 and December 31, 2017,
respectively |
|
|
766 |
|
|
|
766 |
|
|
|
Additional paid-in capital |
|
|
1,460,460 |
|
|
|
1,318,181 |
|
|
|
Accumulated deficit |
|
|
(1,026,409 |
) |
|
|
(957,885 |
) |
|
|
Accumulated other comprehensive income (loss) |
|
|
39 |
|
|
|
(3 |
) |
|
|
Total shareholders'
equity |
|
|
434,856 |
|
|
|
361,059 |
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
773,153 |
|
|
$ |
462,047 |
|
|
|
|
|
|
|
|
|
|
INSMED INCORPORATED |
|
|
|
Consolidated Statements of Net
Loss |
|
|
|
(in thousands, except per share
data) |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March
31, |
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Research
and development |
|
30,098 |
|
|
|
22,254 |
|
|
|
|
|
General
and administrative |
|
32,653 |
|
|
|
13,715 |
|
|
|
|
|
Total
operating expenses |
|
62,751 |
|
|
|
35,969 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(62,751 |
) |
|
|
(35,969 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Investment income |
|
2,040 |
|
|
|
154 |
|
|
|
|
|
Interest expense |
|
(5,642 |
) |
|
|
(1,474 |
) |
|
|
|
|
Loss on extingushment
of debt |
|
(2,209 |
) |
|
|
- |
|
|
|
|
|
Other income (expense),
net |
|
86 |
|
|
|
(95 |
) |
|
|
|
|
Loss
before income taxes |
|
(68,476 |
) |
|
|
(37,384 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
48 |
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(68,524 |
) |
|
$ |
(37,414 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share |
$ |
(0.89 |
) |
|
$ |
(0.60 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic
and diluted common shares outstanding |
|
76,619 |
|
|
|
62,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
INSMED INCORPORATED |
|
Reconciliation of GAAP to Non-GAAP
Results |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses - GAAP |
|
$ |
62,751 |
|
|
$ |
35,969 |
|
|
|
Stock-based
compensation expense |
|
|
(5,674 |
) |
|
|
(4,032 |
) |
|
|
Depreciation |
|
|
(769 |
) |
|
|
(716 |
) |
|
|
Cash-based operating expenses - Non-GAAP |
$ |
56,308 |
|
|
$ |
31,221 |
|
|
|
|
|
|
|
|
|
Contact:
Blaine Davis Insmed Incorporated (908) 947-2841
blaine.davis@insmed.com
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