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, 2018 and provided a business update.
“We are approaching a key inflection point for the business as
we prepare for the potential approval and launch of our first
commercial product, ALIS, which we studied in adult patients with
nontuberculous mycobacterial (NTM) lung disease caused by
Mycobacterium avium complex (MAC),” commented Will Lewis, President
and Chief Executive Officer of Insmed. “We look forward to the U.S.
Food and Drug Administration (FDA) Advisory Committee meeting next
week to discuss our New Drug Application for ALIS and the
significant unmet need in this orphan disease, for which there are
currently no approved inhaled therapies in the U.S. Our
commercial team is executing our strategy in an effort to support a
potential U.S. launch early in the fourth quarter of this year, and
we continue to lay the groundwork for long-term growth, with
efforts ongoing to support regulatory submissions in Japan and
Europe and plans for additional studies to support life cycle
management for ALIS.”
Recent Corporate Developments
New Drug Application (NDA) Accepted for Priority Review
with PDUFA Action Date of September 28, 2018; FDA Advisory
Committee Set for August 7, 2018
In May, Insmed reported that the FDA granted Insmed's request
for Priority Review of its NDA for ALIS for adult patients with NTM
lung disease caused by MAC and set a PDUFA action date of September
28, 2018. The Division of Antimicrobial Products of the FDA has
scheduled an advisory committee meeting to review data supporting
the NDA on August 7, 2018. The FDA previously designated ALIS
an orphan drug, a breakthrough therapy, and a Qualified Infectious
Disease Product (QIDP) under the Generating Antibiotic Incentives
Now (GAIN) Act.
ALIS Data Presented at the American
Thoracic Society (ATS) 2018 International Conference
In late May, Insmed presented detailed data from its ongoing
Phase 3 CONVERT study of ALIS in adult patients with treatment
refractory NTM lung disease caused by MAC at the ATS 2018
International Conference. The global CONVERT study met its
primary endpoint of culture conversion by Month 6 with statistical
significance (p <0.0001). In the study, the addition of ALIS to
guideline-based therapy (GBT) eliminated evidence of NTM lung
disease caused by MAC in sputum by Month 6 in 29% of patients,
compared to 9% of patients on GBT alone.
Strengthening Expertise in Japan
In mid-May, Insmed also appointed Leo Lee to its Board of
Directors. Mr. Lee has deep global commercial leadership
experience, with more than 21 years of his career in the
pharmaceutical industry spent in Japan, most recently at Merck
KGaA, a global pharmaceutical company, where he served as
President, Japan. Prior to his role at Merck KGaA, Mr.
Lee served as President, Japan of Allergan plc, a
global pharmaceutical company, from 2011 to 2015.
During the second quarter, Insmed hired Yuji Orihara to the
position of General Manager, Insmed Asia Pacific, to advance our
efforts toward potential commercialization of ALIS in Japan.
Mr. Orihara joins Insmed from Gilead Sciences, Inc., where he was
most recently the President of Gilead Sciences, Japan.
Second Quarter Financial Results
For the second quarter of 2018, Insmed reported a net
loss of $76.4 million, or $1.00 per share, compared with
a net loss of $44.7 million, or $0.72 per share, for the
second quarter of 2017.
Research and development expenses were $35.7
million for the second quarter of 2018, compared
with $26.9 million for the second quarter of 2017. The
increase as compared to the second quarter of 2017 was primarily
due to an increase in external manufacturing expenses for ALIS
production-related activities and higher compensation and related
expenses due to an increase in headcount.
General and administrative expenses for the second quarter of
2018 were $37.2 million, compared with $16.6
million for the second quarter of 2017. The increase was
primarily due to higher compensation and related expenses due to an
increase in headcount, including the hiring of our field force, and
higher consulting expenses related to our pre-commercial planning
activities for ALIS.
Balance Sheet and Cash Guidance
As of June 30, 2018, Insmed had cash and cash
equivalents of $634.3 million. The Company's operating
expenses for the second quarter of 2018 were $72.9 million.
The cash-based operating expenses for the second quarter of 2018
were $65.3 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 INS1007, 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 $150 million to $170 million
for the second 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 5199733. 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 August 9, 2018 by dialing
(855) 859-2056 (domestic) or (404) 537-3406 (international) and
referencing conference ID number 5199733. 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
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, the outcome of the upcoming advisory committee meeting,
extensions of action dates under PDUFA or complexity in the review
process for combination products; imposition of significant
post-approval regulatory requirements on our product candidates or
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; 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; 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
Follow
|
INSMED INCORPORATED |
|
Consolidated Balance
Sheets |
|
(in thousands, except par value and
share data) |
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
As of |
|
|
|
|
June 30, 2018 |
|
|
December 31, 2017 |
|
|
|
|
(unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
634,329 |
|
$ |
381,165 |
|
Prepaid expenses and other current assets |
|
|
10,929 |
|
|
8,279 |
|
Total current assets |
|
|
645,258 |
|
|
389,444 |
|
|
|
|
|
|
|
|
|
In-process
research and development |
|
|
58,200 |
|
|
58,200 |
|
Fixed
assets, net |
|
|
17,881 |
|
|
12,432 |
|
Other
assets |
|
|
2,905 |
|
|
1,971 |
|
Total assets |
|
$ |
724,244 |
|
$ |
462,047 |
|
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
15,966 |
|
$ |
14,671 |
|
Accrued expenses |
|
|
29,046 |
|
|
29,339 |
|
Other current liabilities |
|
|
630 |
|
|
646 |
|
Total current liabilities |
|
|
45,642 |
|
|
44,656 |
|
|
|
|
|
|
|
|
|
Long-term
debt, net |
|
|
307,156 |
|
|
55,567 |
|
Other
long-term liabilities |
|
|
805 |
|
|
765 |
|
Total liabilities |
|
|
353,603 |
|
|
100,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
Common stock, $0.01 par value; 500,000,000 |
|
|
|
|
|
|
|
authorized shares, 77,038,788 and 76,610,508 issued and
outstanding shares at June 30, 2018 and December 31, 2017,
respectively |
|
|
770 |
|
|
766 |
|
Additional paid-in capital |
|
|
1,472,699 |
|
|
1,318,181 |
|
Accumulated deficit |
|
|
(1,102,846) |
|
|
(957,885) |
|
Accumulated other comprehensive income (loss) |
|
|
18 |
|
|
(3) |
|
Total
shareholders' equity |
|
|
370,641 |
|
|
361,059 |
|
Total liabilities and shareholders' equity |
|
$ |
724,244 |
|
$ |
462,047 |
INSMED INCORPORATED |
Consolidated Statements of Net
Loss |
(in thousands, except per share
data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
Revenues |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
|
35,722 |
|
|
|
26,871 |
|
|
|
65,820 |
|
|
|
49,125 |
General and administrative |
|
37,160 |
|
|
|
16,644 |
|
|
|
69,813 |
|
|
|
30,359 |
Total operating expenses |
|
72,882 |
|
|
|
43,515 |
|
|
|
135,633 |
|
|
|
79,484 |
|
|
|
|
|
|
|
|
Operating loss |
|
(72,882) |
|
|
|
(43,515) |
|
|
|
(135,633) |
|
|
|
(79,484) |
|
|
|
|
|
|
|
|
Investment income |
|
2,729 |
|
|
|
169 |
|
|
|
4,769 |
|
|
|
323 |
Interest expense |
|
(6,488) |
|
|
|
(1,489) |
|
|
|
(12,130) |
|
|
|
(2,963) |
Loss on extingushment of debt |
|
- |
|
|
|
- |
|
|
|
(2,209) |
|
|
|
- |
Other income, net |
|
244 |
|
|
|
200 |
|
|
|
330 |
|
|
|
105 |
Loss before income taxes |
|
(76,397) |
|
|
|
(44,635) |
|
|
|
(144,873) |
|
|
|
(82,019) |
|
|
|
|
|
|
|
|
Provision for income taxes |
|
40 |
|
|
|
37 |
|
|
|
88 |
|
|
|
67 |
|
|
|
|
|
|
|
|
Net loss |
$ |
(76,437) |
|
|
$ |
(44,672) |
|
|
$ |
(144,961) |
|
|
$ |
(82,086) |
|
|
|
|
|
|
|
|
Basic and diluted net loss per share |
$ |
(1.00) |
|
|
$ |
(0.72) |
|
|
$ |
(1.89) |
|
|
$ |
(1.32) |
|
|
|
|
|
|
|
|
Weighted average basic and diluted common shares
outstanding |
|
76,767 |
|
|
|
62,209 |
|
|
|
76,693 |
|
|
|
62,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSMED INCORPORATED |
Reconciliation of GAAP to Non-GAAP
Results |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses - GAAP |
$ |
72,882 |
|
|
$ |
43,515 |
|
|
$ |
135,633 |
|
|
$ |
79,484 |
Stock-based compensation expense |
|
(6,629) |
|
|
|
(4,559) |
|
|
|
(12,303) |
|
|
|
(8,591) |
Depreciation |
|
(929) |
|
|
|
(738) |
|
|
|
(1,698) |
|
|
|
(1,454) |
Cash-based operating expenses - Non-GAAP |
$ |
65,324 |
|
|
$ |
38,218 |
|
|
$ |
121,632 |
|
|
$ |
69,439 |
|
|
|
|
|
|
|
|
Contact:
Blaine Davis Insmed Incorporated (908) 947-2841
blaine.davis@insmed.com
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