RICHMOND, Va., Aug. 8 /PRNewswire-FirstCall/ -- Insmed Inc.
(NASDAQ: INSM), a developer of follow-on biologics and
biopharmaceuticals, today reported results for the second quarter
and six-months ended June 30, 2008. Recent Company Highlights --
Follow-on Biologics Program -- Completed clinical trial
demonstrating the bioequivalence of INS-19, the company's
recombinant human granulocyte colony stimulating factor (G-CSF), to
Neupogen(R), an FDA-approved G-CSF product for the treatment of
neutropenia that recorded 2007 sales of approximately $1 billion;
-- Retained The Honorable Bill Thomas, Former Chairman of the House
Ways and Means Committee from 2001 to 2007, as a strategic advisor
to provide counsel on the Company's efforts to bring follow-on
biologics ("FOB") to U.S. consumers; -- Retained the services of
RBC Capital Markets ("RBC") to act as Insmed's strategic financial
advisor to evaluate and focus the Company's strategic initiatives.
-- IPLEX(TM) -- The Phase 2 trial of IPLEX(TM) in Myotonic Muscular
Dystrophy ("MMD"), which was initiated in December 2007, has seen a
strong patient and physician interest and is now fully enrolled; --
Received $2.6 million in cost recovery revenue in the second
quarter related to the expanded access program ("EAP") for
IPLEX(TM). The EAP in Italy to treat patients with Amyotrophic
Lateral Sclerosis ("ALS"), also known as Lou Gehrig's Disease,
currently includes 22 physicians and approximately 100 subjects
have enrolled. "Over the past several months, Insmed has achieved
several important milestones across the full spectrum of its
business," said Geoff Allan, President and CEO of Insmed. "Most
importantly, our FOB initiatives have received strong scientific
validation with the exciting results of the INS-19 clinical trial
that demonstrated bioequivalence to Neupogen(R), opening the door
to a potential meeting with the FDA to discuss the initiation of a
possible Phase 3 trial. Additionally, retaining both Chairman
Thomas to represent our interests inside the Beltway in the
discussion around creating a regulatory pathway for FOB, and RBC to
evaluate our strategic financial options will ensure that we make
informed decisions for moving our FOB program forward, and
advancing the development of IPLEX(TM) in MMD and ALS." Revenues
for the second quarter ended June 30, 2008 were $2.6 million, up
from $2.3 million for the corresponding period in 2007. The
increase was primarily attributable to a $1.4 million improvement
in cost recovery from our EAP to treat patients with ALS in Italy.
This was partially offset by the absence of license income from our
agreement with Napo Pharmaceuticals Inc., ("Napo") from which we
received a milestone payment in the second quarter of 2007. The net
loss for the second quarter of 2008 was $4.7 million or $0.04 per
share, compared with a net loss of $2.5 million or $0.02 per share
in the second quarter of 2007. This $2.2 million increase was
primarily attributable to a $2.2 million increase in total expenses
as the increase in revenues for the quarter was offset by the
increase in net interest expense. The $2.2 million total increase
in expenses was due primarily to a $1.8 million increase in
research and development expenses ("R&D Expenses"), a $340,000
increase in selling, general and administrative expenses ("SG&A
Expenses"), and the realization of a $54,000 non-cash loss on
investments. The higher R&D Expenses reflected a rise in
clinical trial costs this last quarter as our FOB and IPLEX(TM)
programs gained momentum. The increase in SG&A Expenses was due
primarily to increased investor relations and public relations
activity and the loss on investments arises from the write-down of
our investment in Napo. This investment, which was funded by a
milestone payment from Napo, was recorded as part of our agreement
with Napo in 2007. For the six months ended June 30, 2008, revenues
totaled $5.0 million, up from $3.9 million in the first six months
of 2007. Consistent with second quarter results, the increase was
primarily attributable to a $3.0 million improvement in cost
recovery from our EAP to treat patients with ALS in Italy. This was
partially offset by the absence of license income from Napo and the
revenues lost from our withdrawal of IPLEX(TM) in the short stature
market pursuant to the terms of our settlement agreement with
Genentech Inc. and Tercica Inc. entered into in 2007. The net loss
for the six months ended June 30, 2008 was $9.5 million, or $0.08
per share, compared to $12.8 million, or $0.12 per share, for first
six months of 2007. Year-over-year, R&D Expenses increased to
$10.8 million for the first half of 2008, from $9.8 million,
reflecting an increase in clinical trial activity for our FOB and
IPLEX(TM) programs. SG&A Expenses fell to $3.0 million for the
first half of 2008 from $6.5 million a year earlier due to the
elimination of litigation expenses following the March 2007
settlement and the removal of commercial expenses associated with
our business restructuring plan. The $446,000 loss on investments
represents the write down on the Napo investment during the first
half of 2008. Interest income for the first half of 2008 was
$375,000 and was a reduction from the $525,000 earned in the same
period of 2007 due to the combination of a lower interest rate
environment and a lower average cash balance. Interest expense
increased to $682,000 in the most recent six month period from
$306,000 during the corresponding period of 2007. The increase was
due to an increase in the debt discount amortization resulting from
the quarterly payment of our 2005 convertible notes, which began in
March 2008. As of June 30, 2008, we had total cash, cash
equivalents and short-term investments on hand of $9.4 million,
compared to $16.5 million on hand as of December 31, 2007. The $7.1
million decrease in cash, cash equivalents and short-term
investments primarily reflects the use of $6.0 million for
operating activities and a $1.1 million principal repayment of our
2005 convertible notes, which began on March 1, 2008. Conference
Call To participate in today's 8:30 AM ET live conference call,
please dial 866-202-1971 (U.S. callers) or 617-213-8842
(international callers), and provide passcode 85261742. A live
webcast of the call will also be available at:
http://phx.corporate-ir.net/playerlink.zhtml?c=122332&s=wm&e=1907655
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 46396392. 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, the FOB market in
the United States may be slow to develop or never develop,
government regulation of the FOB market (in foreign countries and
possibly in the United States) could be onerous or slow in
developing or never develop, we may lack financial resources to
complete development of product candidates or to fund the ongoing
operations of the Company, 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 FOB 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 Annual Report on
Form 10-K for the year ended December 31, 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) (unaudited)
June 30, December 31, 2008 2007 Assets Current assets: Cash, cash
equivalents and short-term investments $9,447 $16,479 Accounts
receivable, net 50 250 Prepaid expenses 193 244 Total current
assets 9,690 16,973 Long-term assets: Restricted cash - long term
2,095 2,095 Investments 54 258 Deferred financing costs, net 117
170 Property and equipment, net - 4 Total long-term assets 2,266
2,527 Total assets $11,956 $19,500 Liabilities and stockholders'
equity Current liabilities: Accounts payable $1,088 $904 Accrued
project costs & other 1,035 503 Payroll liabilities 1,178 631
Restricted stock unit liability 12 Interest payable 18 23 Deferred
rent 115 115 Deferred income 825 245 Convertible debt 2,211 2,211
Debt discount (784) (950) Net convertible debt 1,427 1,261 Total
current liabilities 5,698 3,682 Long-term liabilities: Convertible
debt 1,658 2,764 Debt discount (312) (651) Net long-term
convertible debt 1,346 2,113 Asset retirement obligation 2,217
2,217 Total liabilities 9,261 8,012 Stockholders' equity: Common
stock; $.01 par value; authorized shares 500,000,000; issued and
outstanding shares, 122,305,635 in 2008 and 121,904,312 in 2007
1,223 1,219 Additional paid-in capital 341,771 341,270 Accumulated
deficit (340,299) (330,759) Accumulated other comprehensive loss:
Unrealized loss on investment - (242) Net stockholders' equity
2,695 11,488 Total liabilities and stockholders' equity $11,956
$19,500 INSMED INCORPORATED Consolidated Statements of Operations
(in thousands, except per share data - unaudited) Three Months
Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 Sales,
net $- $- $- $423 Royalties 29 17 54 52 License income - 1,045 -
1,545 Other expanded access program income 2,619 1,213 4,911 1,915
Total revenues 2,648 2,275 4,965 3,935 Operating expenses: Cost of
goods sold - - - 576 Research and development 5,536 3,691 10,777
9,796 Selling, general and administrative 1,493 1,153 2,975 6,535
Loss on investments 54 - 446 - Total expenses 7,083 4,844 14,198
16,907 Operating loss (4,435) (2,569) (9,233) (12,972) Interest
income 96 224 375 525 Interest expense (328) (155) (682) (306) Net
loss $(4,667) $(2,500) $(9,540) $(12,753) Basic and diluted net
loss per share $(0.04) $(0.02) $(0.08) $(0.12) Shares used in
computing basic and diluted net loss per share 121,989 113,577
121,989 107,486 INSMED INCORPORATED Consolidated Statements of Cash
Flows (in thousands - unaudited) Six Months Ended June 30, 2008
2007 Operating activities Net loss $(9,540) $(12,753) Adjustments
to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 562 168 Stock based compensation
expense 298 129 Stock options issued for services 140 39 Realized
loss on investments 446 - Changes in operating assets and
liabilities: Accounts receivable 200 241 Inventory - 576 Other
assets 51 (124) Accounts payable 184 (6,507) Accrued project costs
532 (702) Payroll liabilities 547 (59) Restricted stock unit
liability 12 - Deferred income 580 - Asset retirement obligation -
295 Interest payable (5) - Net cash used in operating activities
(5,993) (18,697) Investing activities Decreases of short-term
investments 4,857 12,044 Purchases of investments - (500) Net cash
provided by investing activities 4,857 11,544 Financing activities
Proceeds from issuance of common stock Public Offering - 18,230
Issuance costs - (1,266) Other 67 83 Total proceeds from issuance
of common stock 67 17,047 Costs incurred in conjunction with
issuance of debt - - Repayment of convertible notes (1,106) - Other
- 297 Net cash (used in) provided by financing activities (1,039)
17,344 (Decrease) Increase in cash and cash equivalents (2,175)
10,191 Cash and cash equivalents at beginning of period 3,554 2,121
Cash and cash equivalents at end of period $1,379 $12,312
Supplemental information Cash paid for interest $129 $141 The table
below details the "Cash and cash equivalents" from the statement of
cash flows to "Cash, cash equivalents and short-term investments"
shown on the balance sheet. June 30, December 31, 2008 2007 Cash
and Cash Equivalents 1,379 3,554 Short-Term Investments 8,068
12,925 Total Cash and Cash Equivalents and Short-Term Investments
9,447 16,479 DATASOURCE: Insmed Inc. CONTACT: Investor Relations
Contact: Brian Ritchie, FD, +1-212-850-5683, ; Corporate
Communications Contact: John Procter, Gibraltar Associates,
+1-202-879-5808, Web site: http://www.insmed.com/
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