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Insmed Annual Report, Year Ended Dec 31, 2007

Filing Date
Filed March 12, 2008
Period End
December 31, 2007
Security
INSM
In the record · 2016–202610-K1110-Q338-K134

INSM filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 134 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Oct ’16Oct ’16
  2. FY2018 annual report10-K · Feb ’19Feb ’19
  3. Leadership change8-K · Jun ’21Jun ’21
  4. Leadership change8-K · May ’25May ’25

01—Abstract

Summary

Summary of the 10-K filed March 12, 2008. Cited figures are marked; the original filing is the authoritative source.

Insmed Incorporated, a Virginia corporation then referred to in the filing as a development stage company, reports in its 10-K for the year ended December 31, 2007 that it is pursuing a dual path strategy: entering the follow-on biologics market and advancing its proprietary protein platform, centered on IPLEX, into niche markets.

Total revenues for 2007 were $7.5 milliona, up from $991,000 in 2006, driven by Expanded Access Program cost recovery, licensing income and IPLEX sales in the first quarter. The net loss narrowed to $20.0 million, or $0.17 per share, from $56.1 million, or $0.59 per share, as selling, general and administrative expenses fell to $8.5 million from $25.7 million and research and development expenses fell to $18.9 million from $21.1 million. The company's financial position is weak.

Cash, cash equivalents and short-term investments were $16.5 millionb at year-end, which the company believes will fund activities into the fourth quarter of 2008. Ernst & Young's report includes a going concern explanatory paragraph citing recurring losses, negative operating cash flows and dependence on financing. The accumulated deficit was approximately $330.8 million.

The company withdrew IPLEX from the U.S. short-stature market under a March 2007 settlement with Tercica and Genentech, and it now focuses on myotonic muscular dystrophy and an Expanded Access Program for ALS in Italy. Investors also face near-term listing and dilution risks.

The common stock moved to the Nasdaq Capital Market on February 29, 2008, and the company has until June 12, 2008 to regain compliance with the $1.00c minimum bid price, or a reverse stock split may be required. Convertible notes, warrants and options could dilute existing shareholders, and the company stated it has no committed sources of capital.

02—Key points

Key Highlights

  1. 2007 total revenues were $7.5 million, compared with $991,000 in 2006.
  2. Net loss was $20.0 million, or $0.17 per share, versus a net loss of $56.1 million, or $0.59 per share, in 2006.
  3. Cash, cash equivalents and short-term investments were $16.5 million at December 31, 2007, which the company believes will fund operations into the fourth quarter of 2008.
  4. Ernst & Young's audit report contains a going concern paragraph, and the accumulated deficit was approximately $330.8 million.
  5. IPLEX was withdrawn from U.S. short-stature sales under the March 2007 settlement with Tercica and Genentech; the company retains development rights in other indications, including MMD and HARS.
  6. Development of INS-19 (G-CSF) and INS-20 (Peg G-CSF) follow-on biologics is complete, with clinical studies planned for 2008.
  7. Common stock was transferred to the Nasdaq Capital Market on February 29, 2008, and the company has until June 12, 2008 to regain compliance with the minimum bid price rule.

03—Questions

Frequently Asked Questions

  1. Why did the net loss decline so sharply in 2007?

    Selling, general and administrative expenses fell to $8.5 million from $25.7 million, reflecting reduced litigation expenses and the elimination of commercial expenses after IPLEX sales were discontinued in March 2007. Research and development expenses also declined to $18.9 million from $21.1 million.

  2. Is the company able to continue as a going concern?

    The auditor's report includes a going concern explanatory paragraph citing recurring operating losses, negative cash flows from operations and dependence on obtaining adequate financing. Management is focusing on raising capital through securities offerings, debt financing and partnerships, and the company states there can be no assurance these efforts will succeed.

  3. What is the company's main revenue source going forward?

    The filing states that the major source of income is expected to be cost recovery charges for the Expanded Access Program in Italy, and the company does not expect material revenues for at least the next several years.

  4. What dilution risk do shareholders face?

    As of February 28, 2008, convertible notes and warrants were convertible into or exercisable for up to approximately 15.8 million shares, about 13% of outstanding common stock, and options covered up to 5.2 million additional shares, about four percent more. Conversion or exercise could significantly dilute existing shareholders.

  5. What is the company's near-term listing risk?

    The company was transferred to the Nasdaq Capital Market on February 29, 2008 and must regain compliance with the $1.00 minimum bid price by June 12, 2008. If it does not, Nasdaq will provide notice of delisting, and the company may need to implement a reverse stock split.

04—Continue

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