On October 30, 2018 Insmed Incorporated (Nasdaq:INSM), a global biopharmaceutical company on a mission to transform the lives of patients with serious and rare diseases, reported financial results for the third quarter ended September 30, 2018 and provided a business update (Press release, Insmed, OCT 30, 2018, View Source [SID1234530643]).
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As previously announced, Insmed received accelerated approval from the U.S. Food and Drug Administration (FDA) on September 28, 2018, for ARIKAYCE (amikacin liposome inhalation suspension) for the treatment of Mycobacterium avium complex (MAC) lung disease as part of a combination antibacterial drug regimen for adult patients who have limited or no alternative treatment options. ARIKAYCE is the first and only therapy approved in the U.S. specifically for patients with MAC lung disease.
"With the FDA approval of ARIKAYCE for the treatment of refractory MAC lung disease, the company has taken a monumental step forward on our journey to transform the lives of patients with serious and rare diseases. We are now focused on executing a successful U.S. launch while laying the groundwork for long-term growth," commented Will Lewis, President and Chief Executive Officer of Insmed. "We look forward to working with the FDA on the design of the post-approval confirmatory study required to support the full approval of ARIKAYCE in a front-line setting; continuing to collaborate with regulators in Europe and Japan to support potential regulatory submissions in those regions; and advancing our pipeline to bring other potential therapies to patients with serious and rare diseases."
Recent Corporate Developments
Commercial Launch of ARIKAYCE Under Way
Following the FDA approval of ARIKAYCE, the Company launched its commercial efforts, with its team of 72 therapeutic specialists conducting outreach to pulmonologists and infectious disease physicians. Insmed also launched the Arikares Support Program, which provides dedicated coordinators to help patients navigate the reimbursement process and trainers to provide support to eligible patients in using ARIKAYCE.
Pivotal Phase 3 CONVERT Study Data Published in American Journal of Respiratory and Critical Care Medicine
In September, results from the CONVERT study were published online in the American Journal of Respiratory and Critical Care Medicine. As previously reported, the study showed that the addition of ARIKAYCE to guideline-based therapy (GBT) eliminated evidence of nontuberculous mycobacterial (NTM) lung disease caused by MAC in sputum cultures by Month 6 in 29.0% of patients (65/224), compared to 8.9% of patients (10/112) on GBT alone (p<0.0001).
New Data Presented at Infectious Disease Week (IDWeek) 2018 and CHEST Annual Meeting
In October, Insmed presented data on MAC lung disease and ARIKAYCE at IDWeek 2018 and at the CHEST Annual Meeting. The presentations included an analysis of the rate and risk factors of all-cause mortality in Medicare beneficiaries with NTM lung disease; an analysis of the incidence and prevalence of NTM lung disease among Medicare beneficiaries; two analyses related to susceptibility in the Phase 3 CONVERT study evaluating the safety and efficacy of ARIKAYCE in adult patients with treatment-refractory NTM lung disease caused by MAC; and interim results from INS-312, the ongoing open-label single-arm extension of the CONVERT study, as of July 2017.
Patent Protection in Japan Extended to 2033
In October, the Japanese Patent Office issued its eighth patent to Insmed for amikacin liposome inhalation suspension, extending exclusivity in Japan by nearly seven and a half years to May 2033. The claims of the patent relate, in part, to systems for treating pulmonary infections.
Third Quarter Financial Results
For the third quarter of 2018, Insmed reported a net loss of $87.7 million, or $1.14 per share, compared with a net loss of $45.2 million, or $0.69 per share, for the third quarter of 2017.
Research and development expenses were $39.5 million for the third quarter of 2018, compared with $26.7 million for the third quarter of 2017. The increase is primarily due to an increase in external manufacturing expenses for ARIKAYCE production-related activities and higher compensation and related expenses due to an increase in headcount.
General and administrative expenses for the third quarter of 2018 were $44.4 million, compared with $17.4 million for the third quarter of 2017. The increase is primarily due to an increase in headcount, including the hiring of our field force, and higher consulting expenses related to pre-commercial planning activities in preparation for the launch of ARIKAYCE.
Balance Sheet and Cash Guidance
As of September 30, 2018, Insmed had cash and cash equivalents of $567.6 million. The Company’s operating expenses for the third quarter of 2018 were $84.0 million. The cash-based operating expenses for the third quarter of 2018 were $75.1 million.
The Company is investing in the following key activities in 2018: (i) the build-out of the commercial organization to support the U.S. launch and potential global expansion activities for ARIKAYCE; (ii) manufacturing of commercial inventory and build-out of an additional third-party manufacturing facility; and (iii) clinical trials for ARIKAYCE and the WILLOW study, our Phase 2 development program for INS1007, along with advancement of other pipeline programs. As a result of these activities, Insmed continues to expect cash-based operating expenses and capital and other cash investments to be toward the low end of the range of $150 million to $170 million for the second half of 2018.
Conference Call
Insmed will host a conference call beginning today at 8:30 AM Eastern Time. Shareholders and other interested parties may participate in the conference call by dialing (844) 707-0669 (domestic) or (703) 639-1223 (international) and referencing conference ID number 2556408. The call will also be webcast live on the Company’s website at www.insmed.com.
A replay of the conference call will be accessible approximately two hours after its completion through November 6, 2018 by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and referencing conference ID number 2556408. A webcast of the call will also be archived for 90 days under the Investor Relations section of the Company’s website at www.insmed.com.
Non-GAAP Financial Measures
In addition to the U.S. generally accepted accounting principles (GAAP) results, this earnings release includes cash-based operating expenses, a non-GAAP financial measure, which Insmed defines as total operating expenses excluding stock-based compensation expense and depreciation expense. A reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure is presented in the table attached to this press release.
Management believes that this non-GAAP financial measure is useful to both management and investors in analyzing our ongoing business and operating performance. Management believes that providing non-GAAP information to investors, in addition to the GAAP presentation, allows investors to view our financial results in the way that management views financial results. Management does not intend the presentation of this non-GAAP financial measure to be considered in isolation or as a substitute for results prepared in accordance with GAAP. In addition, this non-GAAP financial measure may differ from similarly named measures used by other companies.
About MAC Lung Disease
Mycobacterium avium complex (MAC) lung disease is a rare and serious disorder that can significantly increase morbidity and mortality. Patients with MAC lung disease can experience a range of symptoms that often worsen over time, including chronic cough, dyspnea, fatigue, fever,
weight loss, and chest pain. In some cases, MAC lung disease can cause severe, even permanent damage to the lungs, and can be fatal.
MAC lung disease is an emerging public health concern worldwide with significant unmet needs. Current guideline-based treatment involves the use of multi-drug regimens that are not specifically approved for MAC lung disease. The course of treatment is often two years or more and is inadequate in treating the disease in many patients.
About ARIKAYCE (amikacin liposome inhalation suspension)
ARIKAYCE is the first and only FDA-approved therapy indicated for the treatment of Mycobacterium avium complex (MAC) lung disease as part of a combination antibacterial drug regimen for adult patients with limited or no alternative treatment options. ARIKAYCE is a novel, inhaled, once-daily formulation of amikacin, an established antibiotic that was historically administered intravenously and associated with severe toxicity to hearing, balance, and kidney function. Insmed’s proprietary PULMOVANCE liposomal technology enables the delivery of amikacin directly to the lungs, where it is taken up by lung macrophages where the infection resides. This approach prolongs the release of amikacin in the lungs while limiting systemic exposure. ARIKAYCE is administered once daily using the Lamira Nebulizer System manufactured by PARI Pharma GmbH.
About PARI Pharma and the Lamira Nebulizer System
ARIKAYCE (amikacin liposome inhalation suspension) is delivered by a novel inhalation device, the Lamira Nebulizer System, developed by PARI. Lamira is a quiet, portable nebulizer that enables efficient aerosolization of liquid medications, including liposomal formulations such as ARIKAYCE, via a vibrating, perforated membrane. Based on PARI’s 100-year history working with aerosols, PARI is dedicated to advancing inhalation therapies by developing innovative delivery platforms and new pharmaceutical formulations that work together to improve patient care.
About CONVERT (INS-212) and INS-312
CONVERT is a randomized, open-label, global Phase 3 trial designed to confirm the sputum culture conversion results seen in Insmed’s Phase 2 clinical trial of ARIKAYCE in patients with refractory NTM lung disease caused by MAC. CONVERT is being conducted in 18 countries at more than 125 sites. The primary efficacy endpoint is the proportion of patients who achieved sputum culture conversion at Month 6 in the ARIKAYCE plus GBT arm compared to the GBT-only arm. Patients who achieved sputum culture conversion by Month 6 are continuing in the CONVERT study for an additional 12 months of treatment following the first monthly negative sputum culture. Patients who did not culture convert may have been eligible to enroll in our INS-312 study. INS-312 is a single-arm open-label extension study for patients who completed six months of treatment in the INS-212 study but did not demonstrate culture conversion by Month 6. Under the study protocol, non-converting patients in the ARIKAYCE plus GBT arm of the INS-212 study will receive an additional 12 months of ARIKAYCE plus GBT. Patients who
crossed over from the GBT-only arm of the INS-212 study will receive 12 months of treatment of ARIKAYCE plus GBT.