News Column

Insmed Reports Second Quarter 2014 Financial Results

August 18, 2014

By a News Reporter-Staff News Editor at Pharma Business Week -- Insmed Incorporated (Nasdaq:INSM) reported financial results for the three and six months ended June 30, 2014. Highlights of the second quarter of 2014 and recent weeks include: Announced plans to file a Market Authorization Application (MAA) with the European Medicines Agency (EMA) for ARIKAYCE™, or liposomal amikacin for inhalation, for the treatment of two orphan lung diseases: nontuberculous mycobacterial (NTM) lung infections in treatment refractory patients and Pseudomonas aeruginosa lung infections in patients with cystic fibrosis (CF);

Announced plans to initiate two global Phase 3 clinical trials of ARIKAYCE in NTM; one for the broad NTM patient population and one confirmatory study for treatment refractory patients with NTM lung infections;

Received Breakthrough Therapy Designation from the U.S. Food and Drug Administration (FDA) for ARIKAYCE to treat NTM lung infections; and

Appointed David R. Brennan, former Chief Executive Officer of AstraZeneca plc, to the Insmed Board of Directors (see also Biopharmaceutical Companies).

"With the recent regulatory clarity, we are moving forward with preparation for commercialization in Europe while simultaneously advancing our two global NTM studies," said Will Lewis, President and Chief Executive Officer of Insmed. "Given these positive developments, we are pleased with the progress we are making toward our goal of bringing this potentially front line therapy to the benefit of the thousands of NTM and CF patients." Second Quarter Financial Results For the second quarter of 2014, Insmed posted a net loss of $23.2 million, or ($0.59) per share, compared with a net loss of $8.9 million, or ($0.28) per share, for the second quarter of 2013. The increase in net loss was primarily due to $11.5 million in Other revenue received during the 2013 quarter related to a one-time payment for the sale of the Company's right to receive future royalties under its license agreement with Premacure (now Shire plc), as well as to higher expenses in the 2014 quarter.

Research and development expense in the 2014 second quarter increased to $14.9 million from $12.2 million in the second quarter of 2013. The increase in research and development expense was primarily due to the build-out of additional third-party manufacturing capacity and higher compensation and personnel-related expenses. These increases were partially offset by a decrease in external clinical expenses, which was primarily related to the completion of the Company's Phase 3 pivotal study in CF patients in 2013.

General and administrative expense for the second quarter of 2014 was $7.9 million compared with $7.5 million in the second quarter of 2013. The increase in general and administrative expense primarily resulted from an increase in pre-commercial activities and higher personnel costs due to an increase in headcount. These increases were largely offset by a $1.4 million decrease in non-cash stock compensation expense in the second quarter of 2014, compared with the prior year's second quarter. Balance Sheet Highlights and Cash Guidance As of June 30, 2014, Insmed had cash and cash equivalents of $82.7 million and working capital of $64.9 million. Excluding depreciation and non-cash stock compensation expense, the Company's cash operating expenses for the three months ended June 30, 2014 was $19.7 million and includes expenditures of $2.1 million related to the build out of additional and redundant third party manufacturing capacity.

During the second half of 2014, the Company plans to continue to fund further clinical development of ARIKAYCE, increase its investment in third-party manufacturing capacity, support efforts to obtain regulatory approvals and prepare for ARIKAYCE commercialization. As a result, Insmed estimates that its cash operating expenses for the second half of 2014 will be in the range of $42 million to $47 million, which includes additional expenditures of $6 million to $8 million for third-party manufacturing capacity. In addition, in the second half of 2014 the Company expects to invest $2.5 million to $3.5 million in new capital expenditures and pay current liabilities of $2.5 million related to the Company's new office and laboratory facilities in Bridgewater, N.J.The Company expects current cash balances will be sufficient to fund operations into 2015. Senior Leadership Team Update Matthew Pauls, Chief Commercial Officer (CCO), will be leaving Insmed in August 2014 to become the Chief Executive Officer of a biopharmaceutical company based in Sweden and the U.S. Insmed plans to initiate a search to identify a new CCO.

Lilia Arviza, PhD, recently joined Insmed in the newly created role of Vice President of Global Medical Affairs. Dr. Arviza is responsible for medical education, medical communication and oversight of grants, investigator initiated studies and the medical science liaison personnel. Dr. Arviza has more than 15 years of medical affairs experience at companies focused on orphan diseases and broader therapeutic indications.

Gina Eagle, MD, was recently promoted to Vice President of Clinical Development. Dr. Eagle is responsible for designing and overseeing the clinical trials and development of the Company's product candidates. Dr. Eagle spent 6 years practicing medicine and has more than 9 years of experience in clinical development in the pharmaceutical industry.

Kevin McDermott was recently promoted to Vice President of Global Market Access. Mr. McDermott is responsible for developing pricing strategies, creating a strong pharmacoeconomic foundation, and securing market access worldwide. Mr. McDermott has more than 14 years of senior leadership in market access.

Keywords for this news article include: Insmed Incorporated, Investment and Finance, Biotechnology Companies, Biopharmaceutical Companies.

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Source: Pharma Business Week

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