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Vertex Pharmaceuticals Incorporated Message Board

  • beachinv beachinv May 24, 2013 12:55 PM Flag

    Check out INSM in CF space also...

    INSM stock has been doing well lately, upcoming phase 3 data for lung infections caused by cystic fibrosis in late July. Stock going to be added to Russell Index in june with funds needing to purchase millions of shares. Like their drug platform using Amikacin (approved FDA drug) with liposomal delivery to deliver potent doasge to infected lungs. Think stock goes to $25 after summer....=)

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    • This will be next big winner - INSM is being accumulated by large institutions - Fidelity (owns 15%), Baker Bros, Orbimed, RA capital, etc....Will also be a big player in ttreating infections caused by CF. We will see $25 in next 2 months.....

    • You need to look at INSM platform - not only treats infections caused by cystic fibrosis but also NTM which has no therapies now. INSM breaking out on volume - new multiyear huighs. Think we see $25 this summer....=)

      • 1 Reply to beachinv
      • johnf50 May 30, 2013 1:59 PM Flag

        A good rule of thumb I have used in the past with Lazard is 70% of their buy recommendation target. I have not done any statistics to see if there is a correlation... just a rough rule of thumb I have noticed and used successfully to see if something is worth my time to look into.

        Lazard recently quoted a price target of $21.00, using my rule of thumb, 70% of that figure is $14.70 and it is trading right now around $14.10. I am willing to hear you break down a business case for why INSM is worth $25... but on the onset, the risk is not worth the reward here so I would not waste my time doing the due diligence.

        If this was trading in the $4 or $5 dollar range I would look at it... and this is where it was for about the last 9 months when it was trading in the $6's, so it looks like the train already left the station.

        Secondly, the most important thing to look at with biotech risk is the burn rate. Sean Williams (MF) recently stated the following, "With a cash burn rate that I anticipate will be right around $50 million annually, it won't be long before Insmed needs cash again and reaches to potentially dilutive offerings to accomplish this. I'd strongly suggest keeping your distance." ~ This is a very large red flag and I appreciate Sean's comment in this regard. I check the last quarterly and they have 79 million in cash / short terms and roughly 40 million in debt. In the last 4Q's they burned 50 M with 30 M in the last 2 so I think Sean is being nice.

        And lastly, Third makes an excellent point below in that INSM's approach is a second tier intervention. Looking at it like a production plan, INSM would then be a hedge against VRTX if they were head to head in comparison. They are not when you compare pipelines.

        Don't chase a run up on biotech my friends. Also, if you have already doubled or tripled in the last 6 to 9 months on INSM it is time to take some money off the table.

        Good luck.

        Sentiment: Strong Buy

    • It is always better to treat the root cause of disease rather than to treat secondary indications. Have you also thought about possible liver toxicity of the drug? All liposomal formulations taken up by the blood stream will end up in the liver, and release their payloads, in this case the highly cytotoxic antibiotic. Do they talk about the possibility?

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