01—Abstract
Summary
Summary of the 10-K filed March 12, 2004. Cited figures are marked; the original filing is the authoritative source.
Insmed Incorporated, a Virginia biopharmaceutical company, reports in its Form 10-K for fiscal 2003 that it is focused on developing drugs for metabolic and endocrine diseases and cancer.
Its lead candidate, rhIGF-I/rhIGFBP-3 (SomatoKine), is in a Phase III trial for growth hormone insensitivity syndrome (GHIS), and the company plans to file a New Drug Application with the FDA and a Marketing Authorization Application with the EMEA for this indication. Its second candidate, rhIGFBP-3, is in pre-clinical development for cancers including breast, lung, colon and prostate. The company has no commercial product sales and reports no revenue of consequence, with 2003 revenues of $150 thousanda.
Financially, Insmed reported a 2003 net loss of $10.3 millionb, or $0.29 per share, down from $36.4 million in 2002, driven mainly by research and development expenses falling to $7.1 million from $18.1 million as clinical trial activity decreased. Cash, cash equivalents and marketable securities were $29.5 million at December 31, 2003, against an accumulated deficit of $186.5 million, and management states that current cash is sufficient to fund operations for the next twelve months. The company raised approximately $13 million in a July 2003 private placement and disclosed that it will need substantial additional funds to continue development and commercialization.
The filing also highlights significant risks: dependence on a single contract manufacturer, Avecia Limited, for bulk drug substance; possible FDA requests for broader long-term trials over diabetic retinopathy concerns; potential competition from Tercica, Inc. for orphan exclusivity in GHIS; and a 2003 Nasdaq minimum bid price deficiency that was resolved when the Panel granted continued listing. The company had 20 full-time employees as of December 31, 2003.
02—Key points
Key Highlights
- Net loss of $10.3 million in 2003 versus $36.4 million in 2002; net loss per share of $0.29 versus $1.10.
- Research and development expenses decreased to $7.1 million in 2003 from $18.1 million in 2002 due to decreased clinical trial activity.
- Cash, cash equivalents and marketable securities of $29.5 million at December 31, 2003; accumulated deficit of $186.5 million.
- Lead candidate rhIGF-I/rhIGFBP-3 (SomatoKine) is in Phase III for growth hormone insensitivity syndrome, with NDA and MAA submissions planned.
- Second candidate rhIGFBP-3 is in pre-clinical development for breast, lung, colon and prostate cancers.
- Company has no commercial product sales; 2003 revenues were $150 thousand, mostly from a 2002 Taisho termination recognition in the prior year.
- Sole bulk drug supplier is Avecia Limited, and the company has no alternative manufacturing facilities.
- Management states existing cash will fund operations for the next twelve months, but substantial additional funding will be needed.
03—Questions
Frequently Asked Questions
What is Insmed's main product candidate and where is it in development?
The lead candidate is rhIGF-I/rhIGFBP-3, also known as SomatoKine. It is in a Phase III clinical trial for severe growth disturbance due to growth hormone insensitivity syndrome, and the company plans to submit a New Drug Application to the FDA and a Marketing Authorization Application to the EMEA.
How much did Insmed lose in 2003 and why did losses narrow?
Insmed reported a net loss of $10.3 million in 2003 compared with $36.4 million in 2002. The decrease was largely due to research and development expenses falling to $7.1 million from $18.1 million, reflecting decreased clinical trial activity.
Does Insmed have enough cash to continue operations?
Management states that its current cash position of $29.5 million at December 31, 2003 will be sufficient to fund operations through the next twelve months. The filing also says the company will need to raise substantial additional funds for development and commercialization, and there is no assurance such funds will be available on favorable terms.
Who manufactures Insmed's drug product and what risks does this create?
Insmed relies on contract manufacturers, and Avecia Limited is its sole provider of bulk rhIGF-I/rhIGFBP-3 at its Billingham, England site. The filing notes that Avecia has never manufactured the product at the scales needed for Phase III and commercialization, and that the company has no alternative manufacturing facilities.
What competitive threats does Insmed face in growth hormone insensitivity syndrome?
Insmed states that it is aware of only one other company, Tercica, Inc., pursuing a product for this indication. Tercica has said it plans to submit a NDA for rhIGF-I for severe pediatric IGF-I deficiency in 2005. The filing also notes that a competing approval could potentially block Insmed's orphan exclusivity for seven or more years.
04—Continue