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Insmed Announces First Quarter 2008 Financial Results
RICHMOND, Va., May 8 /PRNewswire-FirstCall/ -- Insmed Inc. NASDAQ: INSM, a developer of follow-on biologics (FOB) and biopharmaceuticals, today reported results for the first quarter ended March 31, 2008.
Recent Company Highlights
-- Follow-on Biologics Program
-- Received regulatory approval from the United Kingdom's Medicines and
Healthcare products Regulatory Agency to initiate a clinical trial
for Insmed's most advanced FOB candidate, INS-19 (Granulocyte Colony
Stimulating Factor or G-CSF), a FOB of the FDA-approved product
Neupogen(R), which had U.S. sales of approximately $0.9 billion in
2007;
-- Received and completed questionnaire from the Chairman and Ranking
Member of the U.S. House of Representatives' Subcommittee on Health
on the possible development of legislation to establish a FOB
regulatory pathway and;
-- Participated in two FOB-focused events: the Center for Business
Intelligence's "Evaluate the Legislative, Economic and Scientific
Implications of the Industry Debate on: Biosimilars and Follow-On
Biologics", and the American Enterprise Institute Follow-On
Biologics Program.
-- IPLEX(TM)
-- All sites have been initiated, received Investigational Review Board
approvals and are actively recruiting trial participants in the
Phase 2 clinical trial for IPLEX(TM) in Myotonic Muscular Dystrophy
("MMD"). The trial presently has 50% of the required 60 patients
enrolled and:
-- Received $2.3 million in cost recovery revenue in the first quarter
related to the expanded access program ("EAP") for IPLEX(TM) in
Italy to treat patients with Amyotrophic Lateral Sclerosis ("ALS"),
also known as Lou Gehrig's Disease. The EAP currently includes 20
physicians and approximately 90 subjects have enrolled.
"We continue to be pleased with the progress achieved in both our FOB and IPLEX(TM) programs," said Geoff Allan, President and CEO of Insmed. "We are aggressively pursuing a partner for our FOB program and continue to advance the development of IPLEX(TM) in MMD and ALS." Revenues for the first quarter ended March 31, 2008 were $2.3 million, up from $1.7 million for the corresponding period in 2007. The increase was primarily attributable to a $1.6 million improvement in cost recovery from our EAP to treat patients with ALS in Italy. This was partially offset by the revenues lost from our withdrawal of IPLEX(TM) in the short stature market pursuant to the terms of our March 2007 Settlement Agreement with Genentech Inc. and Tercica Inc., and the absence of license income from our agreement with Napo Pharmaceuticals Inc., ("Napo") from which we received a milestone payment in the first quarter of 2007. The net loss for the first quarter of 2008 was $4.9 million or $0.04 per share, compared with a net loss of $10.3 million or $0.10 per share in the first quarter of 2007. This $5.4 million improvement was primarily attributable to the $0.6 million increase in revenues noted above and a $4.9 million reduction in total expenses. The $4.9 million total reduction in expenses was due to a $3.9 million decline in selling, general and administrative expenses ("SG&A Expenses"), a $0.9 million decrease in research and development expenses ("R&D Expenses"), and the elimination of $576,000 cost of goods sold, which was partially offset by a $392,000 non-cash loss on investments. The reduction in SG&A Expenses was due primarily to the elimination of litigation expenses following the March 2007 settlement and the removal of commercial expenses associated with our business restructuring plan. The elimination of the cost of goods sold resulted from our withdrawal of IPLEX(TM) from the short stature market. The lower R&D Expenses reflected the reduced operating costs at our manufacturing facility located in Boulder, Colorado as we streamlined the facility to support our clinical activities following the withdrawal of IPLEX(TM) from the commercial short stature market. The realized 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. Interest income in the first quarter of 2008 at $279,000 was slightly below the $301,000 earned in the same period of 2007 and was primarily due to the lower interest rate environment. Interest expense increased to $354,000 in the most recent period from $151,000 during the corresponding period of 2007. The reduction 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 March 31, 2008, we had total cash, cash equivalents and short-term investments on hand of $12.0 million, compared to $16.5 million on hand as of December 31, 2007. The $4.5 million decrease in cash, cash equivalents and short-term investments primarily reflects the use of $3.9 million for operating activities and a $553,000 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 888-680-0879 (U.S. callers) or 617-213-4856 (international callers), and provide passcode 36651483. A live webcast of the call will also be available at: http://phx.corporate-ir.net/playerlink.zhtml?c=122332&s=wm&e=1833642. 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 13315852. 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 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 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
brian.ritchie@fd.com
Corporate Communications Contact:
John Procter - Gibraltar Associates
202-879-5808
jprocter@gibraltar-llc.com
INSMED INCORPORATED
Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
March 31, December 31,
2008 2007
Assets
Current assets:
Cash, cash equivalents and short-term
investments $12,030 $16,479
Accounts receivable, net 327 250
Prepaid expenses 110 244
Total current assets 12,467 16,973
Long-term assets:
Restricted cash - long term 2,095 2,095
Investments 108 258
Deferred financing costs, net 142 170
Property and equipment, net - 4
Total long-term assets 2,345 2,527
Total assets $14,812 $19,500
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $804 $904
Accrued project costs & other 515 503
Payroll liabilities 799 631
Interest payable 20 23
Deferred rent 115 115
Deferred income 271 245
Convertible debt 2,211 2,211
Debt discount (865) (950)
Net convertible debt 1,346 1,261
Total current liabilities 3,870 3,682
Long-term liabilities:
Convertible debt 2,211 2,764
Debt discount (476) (651)
Net long-term convertible debt 1,735 2,113
Asset retirement obligation 2,217 2,217
Total liabilities 7,822 8,012
Stockholders' equity:
Common stock; $.01 par value; authorized
shares 500,000,000; issued and outstanding
shares, 121,904,312 1,219 1,219
Additional paid-in capital 341,403 341,270
Accumulated deficit (335,632) (330,759)
Accumulated other comprehensive loss:
Unrealized loss on investment - (242)
Net stockholders' equity 6,990 11,488
Total liabilities and stockholders' equity $14,812 $19,500
INSMED INCORPORATED
Consolidated Statements of Operations
(in thousands, except per share data - unaudited)
Three Months Ended
March 31,
2008 2007
Sales, net $ - $423
Royalties 25 35
License income - 500
Other expanded access program income 2,292 702
Total revenues 2,317 1,660
Operating expenses:
Cost of goods sold - 576
Research and development 5,241 6,105
Selling, general and administrative 1,482 5,382
Realized loss on investments 392 -
Total expenses 7,115 12,063
Operating loss (4,798) (10,403)
Interest income 279 301
Interest expense (354) (151)
Net loss $(4,873) $(10,253)
Basic and diluted net loss per share $(0.04) $(0.10)
Shares used in computing basic and diluted
net loss per share 121,904 101,328
INSMED INCORPORATED
Consolidated Statements of Cash Flows
(in thousands - unaudited)
Three Months Ended
March 31,
2008 2007
Operating activities
Net loss $(4,873) $(10,253)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 292 82
Stock based compensation expense 133 56
Stock options issued for services - 8
Realized loss on investments 392 -
Changes in operating assets and liabilities:
Accounts receivable (77) 130
Inventory - 576
Other assets 134 52
Accounts payable (100) (2,936)
Accrued project costs 12 (547)
Payroll liabilities 168 812
Deferred income 26 -
Asset retirement obligation - 147
Interest payable (3) -
Net cash used in operating activities (3,896) (11,873)
Investing activities
Decreases (increases) of short-term investments 5,601 12,044
Purchases of investments - (500)
Net cash provided by investing activities 5,601 11,544
Financing activities
Repayment of convertible notes (553) -
Cash restricted to restricted letters of credit - 297
Net cash (used in) provided by financing activities (553) 297
Increase (decrease) in cash and cash equivalents 1,152 (32)
Cash and cash equivalents at beginning of period 3,554 2,121
Cash and cash equivalents at end of period $4,706 $2,089
Supplemental information
Cash paid for interest $68 $71
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.
March 31,
2008
Cash and Cash Equivalents 4,706
Short-Term Investments 7,324
Total Cash and Cash Equivalents and
Short-Term Investments 12,030
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