Insmed Reports Second Quarter Financial Results

Insmed Reports Second Quarter Financial Results 
Conference Call Begins at 8:30 a.m. Eastern Time Today 
MONMOUTH JUNCTION, NJ -- (Marketwired) -- 08/06/13 --  Insmed
Incorporated (NASDAQ: INSM), a biopharmaceutical company focused on
developing and commercializing an inhaled anti-infective to treat
patients battling serious lung diseases that are often
life-threatening, reported financial results for the three and six
months ended June 30, 2013. 
Highlights of the second quarter of 2013 and recent weeks include: 


 
--  Achieved the Primary Endpoint in a Registrational Phase 3 Clinical
    Trial of ARIKACE(R) to treat Cystic Fibrosis (CF) Patients with
    Pseudomonas aeruginosa infections (Pa). The European and Canadian
    Phase 3 clinical trial of once-daily ARIKACE (liposomal amikacin for
    inhalation) achieved its primary endpoint of non-inferiority to
    twice-daily TOBI(R) (tobramycin inhalation solution) for relative
    change in forced expiratory volume in one second (FEV1) from baseline
    to end of study. Secondary endpoints showed comparability of
    once-daily ARIKACE compared with twice-daily TOBI consistent with the
    primary endpoint of the study.
--  Granted Qualified Infectious Disease Product (QIDP) and Fast Track
    Designations for ARIKACE in Nontuberculous Mycobacteria (NTM) Lung
    Infections. The U.S. Food and Drug Administration (FDA) granted
    ARIKACE QIDP and Fast Track designations for the treatment of NTM.
--  Completed an Underwritten Public Offering. Insmed completed an
    underwritten public offering of 6.9 million shares of common stock,
    which reflects the underwriters' exercise in full of their
    over-allotment option of 900,000 shares, which provided net proceeds
    to the Company of approximately $67.0 million.
--  Received Notice of Allowance for Key European Composition-of-Matter
    Patent for ARIKACE. The European Patent Office notified Insmed that it
    intends to grant a key European composition of matter patent for
    ARIKACE. Once granted, the patent will provide protection for novel
    anti-infective formulations comprising an aminoglycoside and Insmed's
    liposomal delivery technology, and methods for making the
    formulations. Amikacin is one of the aminoglycosides covered by the
    patent. The pa
tent also includes claims relating to the use of the
    aminoglycoside/lipid formulations for treating pulmonary infections,
    including those caused by Pa and certain mycobacterial infections,
    among others.
--  Appointed Christine Pellizzari as General Counsel and Secretary. In
    July, Ms. Pellizzari joined Insmed with nearly 20 years of experience
    at development- and commercial-stage biopharmaceutical companies,
    including senior-level legal and strategic leadership roles at
    Aegerion Pharmaceuticals and Dendrite, Inc.

  
"Throughout the second quarter and in recent weeks we made significant
progress in a number of areas critical to our goal of becoming a
patient-centric biopharmaceutical company. We reported positive
clinical data and regulatory developments, fortified our patent
portfolio, enhanced our management team and strengthened our balance
sheet. We are focused on preparing our regulatory filing for ARIKACE
in Europe and Canada to treat Pseudomonas aeruginosa infections in
patients with CF, and pursuing a dialogue with the FDA regarding the
U.S. regulatory pathway for ARIKACE to treat NTM," said Will Lewis,
President and Chief Executive Officer of Insmed. 
"With positive Phase 3 data for our CF indication and our QIDP and
Fast Track designations for our NTM indication, we are actively
moving forward with our strategy to bring once-daily ARIKACE to
patients suffering from these orphan lung diseases in two indications
in two geographies in two years," concluded Mr. Lewis. 
Second Quarter Financial Results 
For the second quarter of 2013, Insmed reported a net loss of $8.9
million, or $0.28 per share, compared with a net loss of $9.7
million, or $0.39 per share, for the second quarter of 2012. The
decrease in net loss is primarily due to $11.5 million in revenue
recorded during the second quarter of 2013 that related to a one-time
payment for the sale of the Company's right to receive future
royalties under its license agreement with Premacure AB (now Shire
plc). This one-time revenue was partially offset by higher research
and development and general and administrative expenses. 
Research and development expenses in the second quarter of 2013
increased to $12.2 million from $7.7 million in the second quarter of
2012, primarily due to higher costs for clinical trial activities
associated with the Company's Phase 3 clinical trial and two-year
open-label extension study in CF patients with pseudomonas lung
infections in Europe and Canada, and its Phase 2 clinical trial in
patients with NTM lung infections in the United States. 
General and administrative expenses for the second quarter of 2013
increased to $7.5 million from $2.2 million in the second quarter of
2012. The increase was primarily due to higher compensation expense,
which included $2.6 million in non-cash stock-based compensation
expense, and $1.0 million in market research and other related costs. 
Balance Sheet Highlights and Cash Guidance 
As of June 30, 2013, Insmed had cash, cash equivalents and a
certificate of deposit totaling $76.8 million, compared with $92.9
million as of December 31, 2012. Excluding the one-time payment of
$11.5 million from Shire, the Company utilized $27.8 million of cash
to fund operations in the first six months of 2013. As of June 30,
2013, working capital was $58.3 million, excluding a $2.2 million
certificate of deposit. 
On July 22, 2013, Insmed completed an underwritten public offering of
6,900,000 shares of the Company's common stock, including the
underwriters' exercise in full of their over-allotment option of
900,000 shares, which generated $67.0 million of net proceeds to the
Company. 
The Company plans to fund further clinical development of ARIKACE,
invest in third party manufacturing capacity and fund its efforts to
obtain regulatory approvals. As a result, the Company estimates that
its cash requirements to fund operations in second half of 2013 will
be in the range of $28 million to $33 million. The Company believes
that its cash balance of $76.8 million as of June 30, 2013, plus the
proceeds from its recently completed public offering, will be
sufficient to fund its operations through 2014. 
Conference Call 
Insmed management will host an investment community conference call
to discuss these results and answer questions today beginning at 8:30
a.m. Eastern time. Shareholders and other interested parties may
participate in the call by dialing 888-803-5993 (domestic) or
706-634-5454 (international) and referencing conference ID number
25882867. The call will also be broadcast live on the Company's
website at www.insmed.com. 
A replay of the conference call will be accessible two hours after
its completion through August 12, 2013, by dialing 855-859-2056
(domestic) or 404-537-3406 (international) and referencing conference
ID number 25882867. The call will also be archived for 90 days on the
Company's website at www.insmed.com. 
About Insmed  
Insmed Incorporated is a biopharmaceutical company dedicated to
improving the lives of patients battling serious lung diseases.
Insmed is focused on the development and commercialization of
ARIKACE(R), or liposomal amikacin for inhalation, for at least two
identified orphan patient populations: 
cystic fibrosis (CF) patients
with Pseudomonas aeruginosa lung infections and patients with
non-tuberculous mycobacteria (NTM) lung infections. For more
information, visit www.insmed.com. 
Forward-looking Statements 
This release contains forward-looking statements. Words, and
variations of words, such as "intend," "expect," "will,"
"anticipate," "believe," "continue," "propose" and similar
expressions are intended to identify forward-looking statements.
Investors are cautioned that such statements in this release,
including statements relating to the status, results and timing of
clinical trials and clinical data, the anticipated benefits of
Insmed's products, the anticipated timing of regulatory submissions,
and the ability to obtain required regulatory approvals, bring
products to market and successfully commercialize products and
Insmed's cash needs constitute forward-looking statements that
involve risks and uncertainties that could cause actual results to
differ materially from those in the forward-looking statements. Such
risks and uncertainties include, without limitation, failure or delay
of European, Canadian, U.S. Food and Drug Administration and other
regulatory reviews and approvals, competitive developments affecting
the Company's product candidates, delays in product development or
clinical trials or other studies, patent disputes and other
intellectual property developments relating to the Company's product
candidates, unexpected regulatory actions, delays or requests, the
failure of clinical trials or other studies or results of clinical
trials or other studies that do not meet expectations, the fact that
subsequent analyses of clinical trial or study data may lead to
different (including less favorable) interpretations of trial or
study results or may identify important implications of a trial or
study that are not reflected in Company's prior disclosures, and the
fact that trial or study results or subsequent analyses may be
subject to differing interpretations by regulatory agencies, the
inability to successfully develop the Company's product candidates or
receive necessary regulatory approvals, inability to make product
candidates commercially successful, changes in anticipated expenses,
changes in the Company's financing requirements or ability raise
additional capital, and other risks and challenges detailed in the
Company's filings with the U.S. Securities and Exchange Commission,
including its Annual Report on Form 10-K for the year ended December
31, 2012 and subsequent filings. Investors are cautioned not to place
undue reliance on any forward-looking statements that speak only as
of the date of this news release. The Company undertakes no
obligation to update these forward-looking statements to reflect
events or circumstances or changes in its expectations. 
-Tables to Follow- 


 
                                                                            
                            INSMED INCORPORATED                             
                        Consolidated Balance Sheets                         
         (in thousands, except par value, share and per share data)         
                                                                            
                                                                            
                                         June 30, 2013    December 31, 2012 
                                       -----------------  ----------------- 
                                          (unaudited)                       
Assets                                                                      
Current assets:                                                             
  Cash and cash equivalents            $          74,588  $          90,782 
  Certificate of deposit                           2,195              2,153 
  Prepaid expenses and other current                                        
   assets                                          1,783                643 
                                       -----------------  ----------------- 
    Total current assets                          78,566             93,578 
                                                                            
In-process research and development               58,200             58,200 
Other assets                                         104                117 
Fixed assets, net                                  1,855              1,666 
                                       -----------------  ----------------- 
    Total assets                       $         138,725  $         153,561 
                                       =================  ================= 
                                                                            
Liabilities and shareholders' equity                                        
Current liabilities:                                                        
  Accounts payable                     $           7,865  $           7,060 
  Accrued expenses                                 3,188              2,933 
  Accrued compensation                             1,889              2,207 
  Accrued lease expense, current                     301                295 
  Deferred rent                                      139                149 
  Capital lease obligations, current                  69                 96 
  Current portion of long term debt                4,650              3,007 
                                       -----------------  ----------------- 
    Total current liabilities                     18,101             15,747 
                                                                            
Accrued lease expense, long-term                     514                647 
Capital lease obligations, long-term                  32                 64 
Debt, long-term                                   14,894             16,221 
                                       -----------------  ----------------- 
    Total liabilities                             33,541             32,679 
                                       -----------------  ----------------- 
                                                                            
Shareholders' equity:                                                       
Common stock, $0.01 par value;                                              
 500,000,000 authorized shares,                                             
 31,999,760 and 31,488,204 issued and                                       
 outstanding shares at June 30, 2013                                        
 and December 31, 2012, respectively                 320                315 
  Additional paid-in capital                     462,944            455,325 
  Warrant to purchase common stock                     -                790 
  Accumulated deficit                           (358,080)          (335,548)
                                       -----------------  ----------------- 
Total shareholders' equity                       105,184            120,882 
                                       -----------------  ----------------- 
    Total liabilities and                                                   
     shareholders' equity              $         138,725  $         153,561 
                                       =================  ================= 
     
                                                                       
                                                                            
                                                                            
                            INSMED INCORPORATED                             
               Consolidated Statements of Comprehensive Loss                
                   (in thousands, except per share data)                    
                                                                            
                                                                            
                                  Three Months Ended     Six Months Ended   
                                       June 30,              June 30,       
                                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
                                                                            
Other revenue                    $  11,500  $       -  $  11,500  $       - 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating expenses:                                                         
  Research and development          12,225      7,745     22,559     12,484 
  General and administrative         7,544      2,238     11,520      4,763 
                                 ---------  ---------  ---------  --------- 
    Total operating expenses        19,769      9,983     34,079     17,247 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating loss                      (8,269)    (9,983)   (22,579)   (17,247)
                                                                            
Investment income                       50        290        101        708 
Interest expense                      (635)        (1)    (1,277)        (3)
Gain on sale of assets, net              -          -          2          5 
                                 ---------  ---------  ---------  --------- 
    Loss before income taxes        (8,854)    (9,694)   (23,753)   (16,537)
                                                                            
Provision (benefit) for income                                              
 taxes                                   -          2     (1,221)         4 
                                 ---------  ---------  ---------  --------- 
                                                                            
Net loss                         $  (8,854) $  (9,696) $ (22,532) $ (16,541)
                                 =========  =========  =========  ========= 
                                                                            
Basic and diluted net loss per                                              
 share                           $   (0.28) $   (0.39) $   (0.71) $   (0.67)
                                 =========  =========  =========  ========= 
                                                                            
Weighted average basic and                                                  
 diluted common shares                                                      
 outstanding                        31,754     24,875     31,654     24,867 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
Net loss                         $  (8,854) $  (9,696) $ (22,532) $ (16,541)
Comprehensive loss:                                                         
  Unrealized (loss) gain on                                                 
   short-term investments, net                                              
   of taxes                              -        (30)         -        186 
                                 ---------  ---------  ---------  --------- 
Comprehensive loss               $  (8,854) $  (9,726) $ (22,532) $ (16,355)
                                 =========  =========  =========  ========= 

  
Contacts:
LHA 
Anne Marie Fields 
Senior Vice President
212-838-3777
afields@lhai.com  
Bruce Voss
Managing Director
310-691-7100
bvoss@lhai.com
 
 
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