—Quarter Highlighted by U.S. FDA Approval
of ARIKAYCE® (amikacin liposome inhalation suspension), Followed by
Immediate Launch—
Insmed Incorporated (Nasdaq:INSM), a global biopharmaceutical
company on a mission to transform the lives of patients with
serious and rare diseases, today reported financial results for the
third quarter ended September 30, 2018 and provided a
business update.
As previously announced, Insmed received accelerated approval
from the U.S. Food and Drug Administration (FDA) on September 28,
2018, for ARIKAYCE® (amikacin liposome inhalation suspension) for
the treatment of Mycobacterium avium complex (MAC) lung disease as
part of a combination antibacterial drug regimen for adult patients
who have limited or no alternative treatment options. ARIKAYCE is
the first and only therapy approved in the U.S. specifically for
patients with MAC lung disease.
“With the FDA approval of ARIKAYCE for the treatment of
refractory MAC lung disease, the company has taken a monumental
step forward on our journey to transform the lives of patients with
serious and rare diseases. We are now focused on executing a
successful U.S. launch while laying the groundwork for long-term
growth,” commented Will Lewis, President and Chief Executive
Officer of Insmed. “We look forward to working with the FDA on the
design of the post-approval confirmatory study required to support
the full approval of ARIKAYCE in a front-line setting; continuing
to collaborate with regulators in Europe and Japan to support
potential regulatory submissions in those regions; and advancing
our pipeline to bring other potential therapies to patients with
serious and rare diseases.”
Recent Corporate Developments
Commercial Launch of ARIKAYCE Under Way
Following the FDA approval of ARIKAYCE, the Company launched its
commercial efforts, with its team of 72 therapeutic specialists
conducting outreach to pulmonologists and infectious disease
physicians. Insmed also launched the Arikares™ Support Program,
which provides dedicated coordinators to help patients navigate the
reimbursement process and trainers to provide support to eligible
patients in using ARIKAYCE.
Pivotal Phase 3 CONVERT Study Data Published in
American Journal of Respiratory and Critical Care
Medicine
In September, results from the CONVERT study were published
online in the American Journal of Respiratory and Critical Care
Medicine. As previously reported, the study showed that the
addition of ARIKAYCE to guideline-based therapy (GBT) eliminated
evidence of nontuberculous mycobacterial (NTM) lung disease caused
by MAC in sputum cultures by Month 6 in 29.0% of patients (65/224),
compared to 8.9% of patients (10/112) on GBT alone
(p<0.0001).
New Data Presented at Infectious
Disease Week (IDWeek) 2018 and CHEST Annual Meeting
In October, Insmed presented data on MAC lung disease and
ARIKAYCE at IDWeek 2018 and at the CHEST Annual Meeting. The
presentations included an analysis of the rate and risk factors of
all-cause mortality in Medicare beneficiaries with NTM lung
disease; an analysis of the incidence and prevalence of NTM lung
disease among Medicare beneficiaries; two analyses related to
susceptibility in the Phase 3 CONVERT study evaluating the safety
and efficacy of ARIKAYCE in adult patients with
treatment-refractory NTM lung disease caused by MAC; and interim
results from INS-312, the ongoing open-label single-arm extension
of the CONVERT study, as of July 2017.
Patent Protection in Japan Extended to 2033
In October, the Japanese Patent Office issued its eighth patent
to Insmed for amikacin liposome inhalation suspension, extending
exclusivity in Japan by nearly seven and a half years to May 2033.
The claims of the patent relate, in part, to systems for treating
pulmonary infections.
Third Quarter Financial Results
For the third quarter of 2018, Insmed reported a net
loss of $87.7 million, or $1.14 per share, compared with
a net loss of $45.2 million, or $0.69 per share, for the
third quarter of 2017.
Research and development expenses were $39.5
million for the third quarter of 2018, compared
with $26.7 million for the third quarter of 2017. The
increase is primarily due to an increase in external manufacturing
expenses for ARIKAYCE production-related activities and higher
compensation and related expenses due to an increase in
headcount.
General and administrative expenses for the third quarter of
2018 were $44.4 million, compared with $17.4
million for the third quarter of 2017. The increase is
primarily due to an increase in headcount, including the hiring of
our field force, and higher consulting expenses related to
pre-commercial planning activities in preparation for the launch of
ARIKAYCE.
Balance Sheet and Cash Guidance
As of September 30, 2018, Insmed had cash and cash
equivalents of $567.6 million. The Company's operating
expenses for the third quarter of 2018 were $84.0 million.
The cash-based operating expenses for the third quarter of 2018
were $75.1 million.
The Company is investing in the following key activities in
2018: (i) the build-out of the commercial organization to support
the U.S. launch and potential global expansion activities for
ARIKAYCE; (ii) manufacturing of commercial inventory and build-out
of an additional third-party manufacturing facility; and (iii)
clinical trials for ARIKAYCE and the WILLOW study, our Phase 2
development program for INS1007, 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 toward the low end of 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 2556408. 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 November 6, 2018 by dialing
(855) 859-2056 (domestic) or (404) 537-3406 (international) and
referencing conference ID number 2556408. 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 U.S. 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 MAC Lung Disease
Mycobacterium avium complex (MAC) lung disease is a rare and
serious disorder that can significantly increase morbidity and
mortality. Patients with MAC lung disease can experience a range of
symptoms that often worsen over time, including chronic cough,
dyspnea, fatigue, fever, weight loss, and chest pain. In some
cases, MAC lung disease can cause severe, even permanent damage to
the lungs, and can be fatal.
MAC lung disease is an emerging public health concern worldwide
with significant unmet needs. Current guideline-based treatment
involves the use of multi-drug regimens that are not specifically
approved for MAC lung disease. The course of treatment is often two
years or more and is inadequate in treating the disease in many
patients.
About ARIKAYCE® (amikacin liposome
inhalation suspension)
ARIKAYCE is the first and only FDA-approved therapy indicated
for the treatment of Mycobacterium avium complex (MAC) lung disease
as part of a combination antibacterial drug regimen for adult
patients with limited or no alternative treatment options. ARIKAYCE
is a novel, inhaled, once-daily formulation of amikacin, an
established antibiotic that was historically administered
intravenously and associated with severe toxicity to hearing,
balance, and kidney function. Insmed’s proprietary PULMOVANCE™
liposomal technology enables the delivery of amikacin directly to
the lungs, where it is taken up by lung macrophages where the
infection resides. This approach prolongs the release of amikacin
in the lungs while limiting systemic exposure. ARIKAYCE is
administered once daily using the Lamira™ Nebulizer System
manufactured by PARI Pharma GmbH.
About PARI Pharma and the
Lamira™ Nebulizer
System
ARIKAYCE® (amikacin liposome inhalation suspension) is delivered
by a novel inhalation device, the Lamira™ Nebulizer System,
developed by PARI. Lamira™ is a quiet, portable nebulizer that
enables efficient aerosolization of liquid medications, including
liposomal formulations such as ARIKAYCE, via a vibrating,
perforated membrane. Based on PARI's 100-year history working with
aerosols, PARI is dedicated to advancing inhalation therapies by
developing innovative delivery platforms and new pharmaceutical
formulations that work together to improve patient care.
About CONVERT (INS-212) and INS-312
CONVERT is a randomized, open-label, global Phase 3 trial
designed to confirm the sputum culture conversion results seen in
Insmed's Phase 2 clinical trial of ARIKAYCE 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 sputum
culture conversion at Month 6 in the ARIKAYCE plus GBT arm compared
to the GBT-only arm. Patients who achieved sputum 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 ARIKAYCE plus GBT arm
of the INS-212 study will receive an additional 12 months of
ARIKAYCE plus GBT. Patients who crossed over from the GBT-only arm
of the INS-212 study will receive 12 months of treatment of
ARIKAYCE plus GBT.
About Insmed
Insmed Incorporated is a global biopharmaceutical company on a
mission to transform the lives of patients with serious and rare
diseases. Insmed’s first commercial product is ARIKAYCE® (amikacin
liposome inhalation suspension), which is approved in the United
States for the treatment of Mycobacterium avium complex (MAC) lung
disease as part of a combination antibacterial drug regimen for
adult patients with limited or no alternative treatment options.
MAC lung disease is a rare and often chronic infection that can
cause 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 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: failure to successfully commercialize or maintain US
approval for ARIKAYCE, the Company’s only approved product;
uncertainties in the degree of market acceptance of ARIKAYCE by
physicians, patients, third-party payers and others in the
healthcare community; the Company’s inability to obtain full
approval of ARIKAYCE from the FDA, including the risk that the
Company will not successfully complete the confirmatory
post-marketing study required for full approval; inability of the
Company, PARI or the Company’s third party manufacturers to comply
with regulatory requirements related to ARIKAYCE or the Lamira
Nebulizer System; the Company’s inability to obtain adequate
reimbursement from government or third-party payers for ARIKAYCE or
acceptable prices for ARIKAYCE; development of unexpected safety or
efficacy concerns related to ARIKAYCE; inaccuracies in the
Company’s estimates of the size of the potential markets for
ARIKAYCE; the Company’s inability to create an effective direct
sales and marketing infrastructure or to partner with third parties
that offer such an infrastructure for distribution of ARIKAYCE;
failure to obtain regulatory approval to expand ARIKAYCE’s
indication to a broader patient population; failure to successfully
conduct future clinical trials for ARIKAYCE and the Company’s
product candidates, including due to the Company’s limited
experience in conducting preclinical development activities and
clinical trials necessary for regulatory approval and the Company’s
inability to enroll or retain sufficient patients to complete the
trials or generate data necessary for regulatory approval; risks
that the Company’s clinical studies will be delayed or that serious
side effects will be identified during drug development; failure to
obtain regulatory approvals for ARIKAYCE outside the US or for the
Company’s product candidates in the US, Europe, Japan or other
markets; failure of third parties on which the Company is dependent
to manufacture sufficient quantities of ARIKAYCE or the Company’s
product candidates for commercial or clinical needs, to conduct the
Company’s clinical trials, or to comply with laws and regulations
that impact the Company’s business or agreements with the Company;
the Company’s inability to attract and retain key personnel or to
effectively manage the Company’s growth; the Company’s inability to
adapt to its highly competitive and changing environment; the
Company’s inability to adequately protect its intellectual property
rights or prevent disclosure of its trade secrets and other
proprietary information and costs associated with litigation or
other proceedings related to such matters; restrictions imposed on
the Company by its material license agreements, including its
license agreements with PARI and AstraZeneca AB, and failure of the
Company to comply with its obligations under such agreements; the
cost and potential reputational damage resulting from litigation to
which the Company is or may become a party, including product
liability claims; limited experience operating internationally;
changes in laws and regulations applicable to the Company’s
business and failure to comply with such laws and regulations; and
inability to repay the Company’s existing indebtedness and
uncertainties with respect to the Company’s ability to access
future capital.
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 Quarterly Report on Form 10-Q for the quarter ended
September 30, 2018 and any subsequent Company 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 |
|
|
September 30, 2018 |
|
December 31, 2017 |
|
|
(unaudited) |
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
567,574 |
|
|
$ |
381,165 |
|
Prepaid
expenses and other current assets |
|
|
9,921 |
|
|
|
8,279 |
|
Total
current assets |
|
|
577,495 |
|
|
|
389,444 |
|
|
|
|
|
|
Intangible assets |
|
|
59,941 |
|
|
|
58,200 |
|
Fixed assets, net |
|
|
19,526 |
|
|
|
12,432 |
|
Other assets |
|
|
4,551 |
|
|
|
1,971 |
|
Total
assets |
|
$ |
661,513 |
|
|
$ |
462,047 |
|
|
|
|
|
|
Liabilities and
shareholders' equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
16,579 |
|
|
$ |
14,671 |
|
Accrued
expenses |
|
|
40,368 |
|
|
|
29,339 |
|
Other
current liabilities |
|
|
472 |
|
|
|
646 |
|
Total
current liabilities |
|
|
57,419 |
|
|
|
44,656 |
|
|
|
|
|
|
Long-term debt,
net |
|
|
311,861 |
|
|
|
55,567 |
|
Other long-term
liabilities |
|
|
826 |
|
|
|
765 |
|
Total
liabilities |
|
|
370,106 |
|
|
|
100,988 |
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
Common
stock, $0.01 par value; 500,000,000 authorized shares, 77,085,715
and 76,610,508 issued and outstanding shares at September 30, 2018
and December 31, 2017, respectively |
|
|
771 |
|
|
|
766 |
|
Additional paid-in capital |
|
|
1,481,205 |
|
|
|
1,318,181 |
|
Accumulated deficit |
|
|
(1,190,589 |
) |
|
|
(957,885 |
) |
Accumulated other comprehensive income (loss) |
|
|
20 |
|
|
|
(3 |
) |
Total shareholders'
equity |
|
|
291,407 |
|
|
|
361,059 |
|
Total
liabilities and shareholders' equity |
|
$ |
661,513 |
|
|
$ |
462,047 |
|
|
|
|
|
|
|
|
|
|
INSMED INCORPORATED |
Consolidated Statements of Net
Loss |
(in thousands, except per share
data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
Revenues |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Research
and development |
|
39,538 |
|
|
|
26,675 |
|
|
|
105,358 |
|
|
|
75,800 |
|
General
and administrative |
|
44,445 |
|
|
|
17,408 |
|
|
|
114,258 |
|
|
|
47,767 |
|
Total
operating expenses |
|
83,983 |
|
|
|
44,083 |
|
|
|
219,616 |
|
|
|
123,567 |
|
|
|
|
|
|
|
|
|
Operating loss |
|
(83,983 |
) |
|
|
(44,083 |
) |
|
|
(219,616 |
) |
|
|
(123,567 |
) |
|
|
|
|
|
|
|
|
Investment income |
|
2,741 |
|
|
|
326 |
|
|
|
7,510 |
|
|
|
649 |
|
Interest expense |
|
(6,675 |
) |
|
|
(1,496 |
) |
|
|
(18,805 |
) |
|
|
(4,459 |
) |
Loss on extingushment
of debt |
|
- |
|
|
|
- |
|
|
|
(2,209 |
) |
|
|
- |
|
Other income, net |
|
220 |
|
|
|
101 |
|
|
|
550 |
|
|
|
206 |
|
Loss
before income taxes |
|
(87,697 |
) |
|
|
(45,152 |
) |
|
|
(232,570 |
) |
|
|
(127,171 |
) |
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
46 |
|
|
|
27 |
|
|
|
134 |
|
|
|
94 |
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(87,743 |
) |
|
$ |
(45,179 |
) |
|
$ |
(232,704 |
) |
|
$ |
(127,265 |
) |
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share |
$ |
(1.14 |
) |
|
$ |
(0.69 |
) |
|
$ |
(3.03 |
) |
|
$ |
(2.01 |
) |
|
|
|
|
|
|
|
|
Weighted average basic
and diluted common shares outstanding |
|
77,066 |
|
|
|
65,312 |
|
|
|
76,819 |
|
|
|
63,199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSMED INCORPORATED |
Reconciliation of GAAP to Non-GAAP
Results |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
- GAAP |
$ |
83,983 |
|
|
$ |
44,083 |
|
|
$ |
219,616 |
|
|
$ |
123,567 |
|
Stock-based
compensation expense |
|
(7,902 |
) |
|
|
(4,741 |
) |
|
|
(20,205 |
) |
|
|
(13,332 |
) |
Depreciation |
|
(954 |
) |
|
|
(714 |
) |
|
|
(2,652 |
) |
|
|
(2,168 |
) |
Cash-based
operating expenses - Non-GAAP |
$ |
75,127 |
|
|
$ |
38,628 |
|
|
$ |
196,759 |
|
|
$ |
108,067 |
|
Contact:
Blaine Davis Insmed Incorporated (908) 947-2841
blaine.davis@insmed.com
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