RICHMOND, Va., March 11 /PRNewswire-FirstCall/ -- Insmed Inc.
(NASDAQ: INSM), a developer of follow-on biologics (FOB) and
biopharmaceuticals, today reported results for the quarter and
full-year ended December 31, 2008. Company Highlights -- Follow-on
Biologics Program -- Insmed entered into a definitive agreement
with Merck & Co., Inc. whereby Merck, through an affiliate,
will purchase all assets related to Insmed's follow-on biologics
platform. -- Insmed to receive a total of $130 million for the
assets. After fees, taxes and other costs related to the
transaction, Insmed expects net proceeds of approximately $123
million as a result of this agreement. -- Insmed will receive
initial payments of up to $10 million for Insmed's lead follow-on
biologic candidates and the remaining balance upon closing of the
transaction, which continues to be targeted for March 31, 2009. --
IPLEX(TM) -- Completed the Phase 2 trial of IPLEX(TM) in Myotonic
Muscular Dystrophy (MMD), and expect preliminary data in the second
quarter of 2009; -- 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; --
Generated $10.5 million in cost recovery revenue from the IPLEX(TM)
expanded access program (EAP) for Amyotrophic Lateral Sclerosis
(ALS or Lou Gehrig's disease) in Italy during 2008. The EAP now
includes 110 patients enrolled and 23 physicians; -- Gained
royalty-free worldwide rights for IPLEX(TM) in connection with
potential EAP ALS programs outside of Italy; -- The European
Medicines Agency (EMEA) granted Premacure AB orphan designation for
Insmed's IPLEX(TM) for the prevention of retinopathy of prematurity
(ROP) in neonates of less than 32 weeks of gestational age.
Premacure AB intends to initiate a phase 2 multicenter trial for
IPLEX(TM) in the ROP indication during the second quarter of 2009.
"The sale of our FOB assets to Merck represents a watershed moment
for Insmed," said Dr. Geoffrey Allan, Ph.D., President and CEO
Insmed. "This agreement demonstrates Insmed's world-class clinical
capabilities, and provides us with a substantial cash infusion that
positions us well for future growth. In the short-term, we expect
to be cash neutral for the balance of 2009 as we continue moving
ahead with our IPLEX(TM) programs for MMD and ALS. In addition, we
intend to pursue a comprehensive and thoughtful analysis to
determine the most appropriate use of the proceeds we will receive
from Merck. Our objective, though, is to utilize this capital to
grow our business, and create additional shareholder value, as we
have done through the transaction with Merck." Financial Results
for Fourth Quarter and Full-year 2008 Revenues for the fourth
quarter ended December 31, 2008 were $2.9 million, up from $2.1 for
the corresponding period in 2007. The increase was mainly
attributable to an $846,000 increase in cost recovery revenue from
our EAP to treat patients with ALS in Italy. The net loss for the
fourth quarter of 2008 was $4.0 million or $0.03 per share,
compared with a net loss of $3.3 million or $0.03 per share in the
fourth quarter of 2007. R&D expenses increased to $5.4 million
from $4.6 million, reflecting an increase in clinical trial
activity for our FOB and IPLEX(TM) programs. SG&A Expenses
increased to $1.3 million from $0.9 million, due primarily to
higher IPLEX(TM) distribution costs and increased legal costs
associated with the Merck transaction. Interest income in the
fourth quarter of 2008 fell to $47,000 from $264,000 in same period
of 2007. 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 increased slightly to $273,000 in the
most recent period from $217,000 during the corresponding period of
2007. Revenues for the full-year 2008 totaled $11.7 million, up
from $7.6 million in the corresponding period of 2007. This
increase was primarily due to a $5.1 million improvement in cost
recovery from the EAP to treat patients with ALS in Italy and the
grant receipt of $1.0 million from the Muscular Dystrophy
Association supporting the IPLEX(TM) MMD trial. 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 March 2007. The net loss for
the 12 months ended December 31, 2008 was $15.7 million or $0.13
per share, compared to $20.0 million or $0.17 per share for the 12
months ended December 31, 2007. R&D Expenses increased to $21.0
million from $19.2 million, reflecting the higher activity as our
clinical trials in the FOB and IPLEX(TM) areas advanced. SG&A
Expenses fell to $5.1 million from $8.2 million, due to the
elimination of litigation expenses following the March 2007
settlement and the removal of commercial expenses associated with
our business restructuring plan. Interest income for the full-year
2008 was $0.5 million, compared to $1.2 million for the full-year
2007. This decrease was mainly due to lower interest rates and a
lower average cash balance for the full-year 2008 as compared to
the full-year 2007. Interest expense for the 12 months ended
December 31, 2008 was $1.3 million, compared to $682,000 for the
corresponding period of 2007. This higher interest expense was due
to an increase in the debt discount amortization resulting from the
quarterly payments of our 2005 convertible notes, which began in
March 2008. The $500,000 loss on investments represents the full
write down on the prior year Napo investment during 2008. As of
December 31, 2008, we had total cash, cash equivalents and
short-term investments on hand of $2.4 million, compared to $16.5
million on hand as of December 31, 2007. The $14.1 million decrease
in cash, cash equivalents and short-term investments mainly
reflected the use of $12.0 million for operating activities and
$2.2 million for principal and interest repayment of our 2005
convertible notes, which began on March 1, 2008. Conference Call To
participate in today's live 8:30 AM ET conference call, please dial
866-700-5192 (U.S. callers) or 617-213-8833 (international), and
provide passcode 10018019. A live webcast of the call will also be
available at
http://phx.corporate-ir.net/playerlink.zhtml?c=122332&s=wm&e=2106073.
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 at 12:30 PM ET on March 11th at
888-286-8010 (U.S. callers) or 617-801-6888 (international), using
passcode 38324430. 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 closing conditions under our agreement with
Merck & Co., Inc. may not be met, 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 continuing efforts to grow the business and develop IPLEX(TM)
may be unsuccessful, the actual market for MMD may not actually
match up with our external assessment, 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. INSMED INCORPORATED
Consolidated Balance Sheets (in thousands, except share and per
share data) December 31, December 31, 2008 2007 Assets Current
assets: Cash, cash equivalents and short-term investments $2,397
$16,479 Accounts receivable, net 122 250 Prepaid expenses 74 244
Total current assets 2,593 16,973 Long-term assets: Restricted cash
- long term 2,095 2,095 Investments - 258 Deferred financing costs,
net 70 170 Property and equipment, net - 4 Total long-term assets
2,165 2,527 Total assets $4,758 $19,500 Liabilities and
stockholders' equity (deficit) Current liabilities: Accounts
payable $1,277 $904 Accrued project costs & other 936 503
Payroll liabilities 453 631 Restricted stock unit liability 113 -
Interest payable 13 23 Deferred rent 168 115 Deferred income 302
245 Convertible debt 2,211 2,211 Debt discount (596) (950) Net
convertible debt 1,615 1,261 Total current liabilities 4,877 3,682
Long-term liabilities: Convertible debt 553 2,764 Debt discount
(66) (651) Net long-term convertible debt 487 2,113 Asset
retirement obligation 2,217 2,217 Total liabilities 7,581 8,012
Stockholders' equity (deficit): Common stock; $.01 par value;
authorized shares 500,000,000; issued and outstanding shares,
122,494,010 in 2008 and 121,904,312 in 2007 1,225 1,219 Additional
paid-in capital 342,378 341,270 Accumulated deficit (346,426)
(330,759) Accumulated other comprehensive loss: Unrealized loss on
investment - (242) Net stockholders' equity (deficit) (2,823)
11,488 Total liabilities and stockholders' equity (deficit) $4,758
$19,500 INSMED INCORPORATED Consolidated Statements of Operations
(in thousands, except per share data - unaudited) Three Months
Ended Twelve Months Ended December 31, December 31, 2008 2007 2008
2007 Sales, net $- $- $- $423 Royalties 61 41 144 121 License
income - 62 - 1,607 Grant revenue - - 1,044 - Other expanded access
Program income, net 2,878 2,032 10,511 5,430 Total revenues 2,939
2,135 11,699 7,581 Operating expenses: Cost of goods sold - - - 576
Research and development 5,353 4,614 21,047 19,198 Selling, general
and administrative 1,324 865 5,063 8,246 Total expenses 6,677 5,479
26,110 28,020 Operating loss (3,738) (3,344) (14,411) (20,439)
Interest income 47 264 500 1,159 Interest expense (273) (217)
(1,256) (682) Loss on investments - - (500) - Net loss $(3,964)
$(3,297) $(15,667) $(19,962) Basic and diluted net loss per share
$(0.03) $(0.03) $(0.13) $(0.17) Shares used in computing Basic and
diluted net loss per share 122,318 121,812 122,132 114,682 INSMED
INCORPORATED Consolidated Statements of Cash Flows (in thousands -
unaudited) Twelve Months Ended December 31, 2008 2007 Operating
activities Net loss $(15,667) $(19,962) Adjustments to reconcile
net loss to net cash used in operating activities: Depreciation and
amortization 1,043 406 Stock based compensation expense 850 521
Stock options issued for services 147 38 Realized loss on
investments 500 - Changes in operating assets and liabilities:
Accounts receivable 128 (9) Inventory - 576 Other assets 170 (157)
Accounts payable 373 (6,282) Accrued project costs & other 433
(612) Payroll liabilities (178) (671) Deferred rent 53 61 Deferred
income 57 245 Restricted stock unit liability 113 - Asset
retirement obligation - 591 Interest payable (10) - Net cash used
in operating activities (11,988) (25,255) Investing activities
Decrease in short-term investments 12,673 9,066 Purchases of
investments - (500) Net cash provided by investing activities
12,673 8,566 Financing activities Proceeds from issuance of common
stock Public Offering - 18,230 Issuance costs - (1,266) Warrants
converted into shares - - Other 117 138 Total proceeds from
issuance of common stock 117 17,102 Repayment of convertible notes
(2,211) - Other - 1,020 Net cash (used in) provided by financing
activities (2,094) 18,122 (Decrease) Increase in cash and cash
equivalents (1,409) 1,433 Cash and cash equivalents at beginning of
period 3,554 2,121 Cash and cash equivalents at end of period
$2,145 $3,554 DATASOURCE: Insmed Inc. CONTACT: Investor Relations:
Brian Ritchie, +1-212-850-5683, , or Media: Irma Gomez-Dib,
+1-212-850-5761, , both of FD, for Insmed Inc. Web Site:
http://www.insmed.com/
Copyright