RICHMOND, Va., March 4 /PRNewswire-FirstCall/ -- Insmed Inc.
(Nasdaq CM: INSM), a developer of follow-on biologics and
biopharmaceuticals, today reported results for the quarter and
full-year ended December 31, 2007. Full-Year 2007 and Recent
Company Highlights -- Follow-on Biologics Program -- Completed
development of INS-19 (Granulocyte Colony Stimulating Factor or
G-CSF) and INS-20 (Peg G-CSF), positioning these products to enter
clinical trials in 2008; -- Testified at two congressional hearings
- "Safe and Affordable Biotech Drugs - The Need for a Generic
Pathway" and "Assessing the Impact of a Safe and Equitable
Biosimilar Policy in the United States" where Geoffrey Allan,
Ph.D., the Company's President and CEO, urged the need to create a
regulatory pathway for the approval of follow-on biologics ("FOBs")
in the U.S.; -- Appointed Steve Glover, who has approximately 25
years of biotechnology experience, as President of the Company's
FOB program in order to most effectively leverage Insmed's
scientific capabilities in the field; -- Completed external market
assessment using a major U.S. market research firm, which indicated
a $9 billion annual market potential for the Company's FOB
candidates whose corresponding innovator products' patents expire
within the next eight years; -- Launched a broad education campaign
on the importance of establishing a regulatory pathway for FOBs in
the U.S.; and -- Commissioned econometric study by economist Dr.
Robert J. Shapiro, former Under Secretary of Commerce in the
Clinton Administration, that identified potential cost savings of
approximately $378 billion over the next 20 years from making FOBs
available in the U.S. -- IPLEX(TM) -- Made IPLEX(TM) available to
physicians in Italy at the request of the Italian Ministry of
Health to treat patients with Amyotrophic Lateral Sclerosis
("ALS"), also known as Lou Gehrig's Disease, through an expanded
access program ("EAP"), with the Company receiving cost recovery
payments for IPLEX(TM) from the Italian Health Authorities. EAP
currently includes 15 physicians and approximately 70 subjects, and
the Company received cost recovery of $5.4 million for IPLEX(TM)
supplied to the EAP in the full-year 2007; -- Announced positive
results from a Phase 2 investigator-sponsored study of IPLEX(TM) in
six patients with myotonic muscular dystrophy ("MMD") that met the
primary study endpoints of being safe and well-tolerated, and
indicated improvements in patients' muscle mass, cholesterol and
triglycerides; -- Initiated a 24-week, multi-center, randomized,
double blind, placebo-controlled Phase 3 enabling clinical trial
with IPLEX(TM) in 60 patients with MMD; -- Awarded a grant of $2.1
million from the Muscular Dystrophy Association ("MDA"), which is
expected to cover a substantial portion of the external costs
associated with the MMD trial; -- Granted Orphan Drug designation
for IPLEX(TM) for the treatment of MMD by the FDA, providing the
Company with, among other important benefits, seven years of market
exclusivity upon approval of IPLEX(TM) for the MMD indication; and
-- Completed an external assessment of the total market for MMD
treatments that indicated that the market for MMD could be as high
as between $800 million and $1.4 billion. "We are clearly making
significant progress in executing on our dual-path business
strategy," said Dr. Allan. "Both our FOBs and IPLEX(TM) programs
achieved substantial milestones in 2007, and possess significant
momentum as we move through 2008. We intend to initiate clinical
trials for our first two FOBs this year and will continue to have
an active voice on the regulatory pathway issue. In addition, we
expect to continue moving IPLEX(TM) through the clinic in multiple
indications, having prioritized MMD as the initial primary
indication." Financial Results for Fourth Quarter and Full-year
2007 Revenues for the fourth quarter ended December 31, 2007 were
$2.1 million, up from $502,000 for the corresponding period in
2006. The increase was mainly attributable to improvements in cost
recovery from our EAP to treat patients with ALS. This was
partially offset by the revenues lost from our withdrawal of
IPLEX(TM) from the short stature market pursuant to the terms of
our Settlement Agreement. The net loss for the fourth quarter of
2007 was $3.3 million or $0.03 per share, compared with a net loss
of $21.4 million or $0.21 per share in the fourth quarter of 2006.
This improvement was attributable to a reduction in selling,
general and administrative expenses ("SG&A Expenses"), which
fell to $947,000 from $9.7 million and the elimination of both a
$7.1 million asset impairment charge and an $836,000 cost of goods
sold charge, which occurred in 2006. These were partially offset by
an increase in research and development expenses ("R&D
Expenses") from $4.3 million to $4.5 million. The reduction in
SG&A Expenses was due primarily to reduced litigation expenses
and the elimination of commercial expenses associated with our
business restructuring plan. The elimination of the asset
impairment charge and cost of goods sold resulted from our
withdrawal of IPLEX(TM) from the short stature market, while the
higher R&D Expenses reflected an increase in our clinical
activity. Interest income in the fourth quarter of 2007 fell to
$264,000 from $528,000 in same period of 2006. This was due to the
combination of a lower average cash balance on hand and lower
interest rates during the most recent quarter. Interest expense
declined to $217,000 in the most recent period from $552,000 during
the corresponding period of 2006 due to the lower conversion of
notes into common stock, which resulted in a reduced debt discount
amortization charge for the last quarter of 2007. Revenues for the
full-year 2007 totaled $7.5 million, up from $991,000 in the
corresponding period of 2006. This increase was due to improvements
in the cost recovery from our EAP and the receipt of licensing
income from our agreement with NAPO Pharmaceuticals Inc., ("NAPO"),
combined with increased sales of IPLEX(TM) during the first quarter
of 2007. The net loss for the 12 months ended December 31, 2007 was
$20.0 million or $0.17 per share, compared to $56.1 million or
$0.59 per share for the 12 months ended December 31, 2006. R&D
Expenses dropped to $18.9 million from $21.1 million, reflecting
lower litigation expenses which were included in R&D Expenses
during the first quarter of 2006, and reduced commercial
manufacturing activity in 2007. SG&A Expenses fell to $8.5
million from $25.7 million, due to a combination of reduced
litigation expenses, which were included in SG&A Expenses for
the final three quarters of 2006, and the elimination of commercial
expenses in 2007. Interest income for the full-year 2007 was $1.2
million, compared to $1.9 million for the full-year 2006. This
decrease was mainly due to lower interest rates and a lower average
cash balance for the full-year 2007 as compared to the full-year
2006. Interest expense for the 12 months ended December 31, 2007
was $682,000, compared to $3.7 million for corresponding period of
2006. This decrease in interest expense resulted from lower
amortization of the debt discount associated with our March 2005
financing, as a significant acceleration of the discount took place
in 2006 due to the conversion of notes into shares of our common
stock. As of December 31, 2007, we had total cash, cash equivalents
and short- term investments on hand of $16.5 million, compared to
$24.1 million on hand as of December 31, 2006. The $7.6 million
decrease in cash, cash equivalents and short-term investments
mainly reflected the use of $25.3 million for operating activities
and a $500,000 investment in NAPO, which was partially offset by
net proceeds of $17.0 million from an offering of our common stock
and warrants to purchase our common stock and $1.0 million from the
reduction of an outstanding letter of credit. Conference Call To
participate in today's 8:30 AM ET live conference call, please dial
800-510-0146 (U.S. callers) or 617-614-3449 (international), and
provide passcode 84349393. A live webcast of the call will also be
available at:
http://phx.corporate-ir.net/playerlink.zhtml?c=122332&s=wm&e=1768582.
Please allow extra time prior to the webcast to register, download
and install any necessary audio software. The webcast will be
archived for 30 days, and a telephone replay of the call will be
available for seven days beginning today at 10:30 AM ET at 888-
286-8010 (U.S. callers) or 617-801-6888 (international callers),
using passcode 90757979. About Insmed Insmed Inc. is a
biopharmaceutical company with unique protein process development
and manufacturing experience and a proprietary protein platform
aimed at niche markets with unmet medical needs. For more
information, please visit http://www.insmed.com/. Forward-Looking
Statements This release contains forward-looking statements which
are made pursuant to provisions of Section 21E of the Securities
Exchange Act of 1934. Investors are cautioned that such statements
in this release, including statements relating to planned clinical
study design, regulatory and business strategies, plans and
objectives of management and growth opportunities for existing or
proposed products, constitute forward-looking statements which
involve risks and uncertainties that could cause actual results to
differ materially from those anticipated by the forward-looking
statements. The risks and uncertainties include, without
limitation, risks that product candidates may fail in the clinic or
may not be successfully marketed or manufactured, we may lack
financial resources to complete development of product candidates,
the FDA may interpret the results of studies differently than us,
competing products may be more successful, demand for new
pharmaceutical products may decrease, the biopharmaceutical
industry may experience negative market trends, our entrance into
the follow on biologics market may be unsuccessful, our common
stock could be delisted from the Nasdaq Capital Market and other
risks and challenges detailed in our filings with the U.S.
Securities and Exchange Commission, including our Quarterly Report
on Form 10-Q for the quarter ended September 30, 2007. Readers are
cautioned not to place undue reliance on any forward-looking
statements which speak only as of the date of this release. We
undertake no obligation to publicly release the results of any
revisions to these forward-looking statements that may be made to
reflect events or circumstances that occur after the date of this
release or to reflect the occurrence of unanticipated events.
Investor Relations Contact: Brian Ritchie - FD 212-850-5683
Corporate Communications Contact: John Procter - Gibraltar
Associates 202-879-5808 INSMED INCORPORATED Consolidated Balance
Sheets (in thousands, except share and per share data) December 31,
December 31, 2007 2006 Assets Current assets: Cash, cash
equivalents and short-term investments $ 16,479 $ 24,112 Short-term
investments - - Restricted cash - 407 Accounts receivable, net 250
241 Inventories - 576 Prepaid expenses 244 87 Total current assets
16,973 25,423 Long-term assets: Restricted cash - long term 2,095
2,708 Investments 258 - Deferred financing costs, net 170 209
Property and equipment, net 4 8 Total long-term assets 2,527 2,925
Total assets $ 19,500 $ 28,348 Liabilities and stockholders' equity
Current liabilities: Accounts payable $ 904 $ 7,187 Accrued project
costs & other 503 1,115 Payroll liabilities 631 1,302 Interest
payable 23 23 Deferred rent 115 54 Deferred income 245 -
Convertible debt 2,211 - Debt discount (950) - Net convertible debt
1,261 - Total current liabilities 3,682 9,681 Long-term
liabilities: Convertible debt 2,764 5,125 Debt discount (651)
(1,964) Net long-term convertible debt 2,113 3,161 Asset retirement
obligation 2,217 1,626 Total liabilities 8,012 14,468 Stockholders'
equity: Common stock; $.01 par value; authorized shares
500,000,000; issued and outstanding shares, 121,904,312 in 2007 and
101,328,118 in 2006 1,219 1,013 Additional paid-in capital 341,270
323,664 Accumulated deficit (330,759) (310,797) Accumulated other
comprehensive loss: Unrealized loss on investment (242) - Net
stockholders' equity 11,488 13,880 Total liabilities and
stockholders' equity $ 19,500 $ 28,348 INSMED INCORPORATED
Consolidated Statements of Operations (in thousands, except per
share data - unaudited) Three Months Ended Twelve Months Ended
December 31, December 31, 2007 2006 2007 2006 Sales, net $ - $ 312
$ 423 $ 263 Royalties 41 50 121 157 License income 62 - 1,607 -
Other expanded access program income 2,039 140 5,378 571 Total
revenues 2,142 502 7,529 991 Operating expenses: Cost of goods sold
- 836 576 1,490 Asset impairment - 7,103 - 7,103 Research and
development 4,539 4,251 18,937 21,089 Selling, general and
administrative 947 9,716 8,455 25,682 Total expenses 5,486 21,906
27,968 55,364 Operating loss (3,344) (21,404) (20,439) (54,373)
Interest income 264 528 1,159 1,937 Interest expense (217) (552)
(682) (3,703) Net loss $ (3,297) $ (21,428) $ (19,962) $ (56,139)
Basic and diluted net loss per share $ (0.03) $ (0.21) $ (0.17) $
(0.59) Shares used in computing basic and diluted net loss per
share 121,812 100,634 114,682 95,321 INSMED INCORPORATED
Consolidated Statements of Cash Flows (in thousands - unaudited)
Twelve Months Ended December 31, 2007 2006 Operating activities Net
loss $ (19,962) $ (56,139) Adjustments to reconcile net loss to net
cash used in operating activities: Depreciation and amortization
406 3,369 Non-cash stock acceleration Stock based compensation
expense 521 885 Stock options issued for services 38 79 Impairment
of property, plant and equipment 5,020 Changes in operating assets
and liabilities: Accounts receivable (9) (241) Inventory 576 (576)
Other assets (157) (4) Accounts payable (6,282) 6,219 Accrued
project costs (612) (875) Payroll liabilities (671) (272) Deferred
rent 61 (232) Deferred income 245 Asset retirement obligation 591
592 Interest payable - (29) Net cash used in operating activities
(25,255) (42,204) Investing activities Increases (Decreases) of
short-term investments 9,066 (12,191) Purchases of investments
(500) - Purchases of property, plant and equipment - (5,020) Net
cash provided by (used in) investing activities 8,566 (17,211)
Financing activities Proceeds from issuance of common stock
Proceeds from issuance of convertible debt with detachable stock
warrants - - Public offering 18,230 43,240 Issuance costs (1,266)
(421) Warrants converted into shares - 9,069 Other 138 325 Total
proceeds from issuance of common stock 17,102 52,213 Costs incurred
in conjunction with issuance of debt - - Changes in cash restricted
to restricted letters of credit 1,020 288 Net cash provided by
financing activities 18,122 52,501 Increase (Decrease) in cash and
cash equivalents 1,433 (6,914) Cash and cash equivalents at
beginning of period 2,121 9,035 Cash and cash equivalents at end of
period $ 3,554 $ 2,121 Supplemental information Cash paid for
interest $ 279 $ 319 DATASOURCE: Insmed Inc. CONTACT: Investors,
Brian Ritchie of FD, +1-212-850-5683, or , or Corporate
Communications, John Procter of Gibraltar Associates,
+1-202-879-5808, or , both for Insmed Inc. Web site:
http://www.insmed.com/
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