For shareholders looking for a more productive Q2 - companies which gain a listing in the Russell 3000 almost invariably experience significant share price appreciation in Q2 driven by automatic share purchase by funds which track the Index. Insmed (INSM) would appear likely to be included this year, and there was significant accumulation concurrent with inclusion in 2009.
Market cap appreciation in recent weeks (end of day) -
Apr 15 - $217,247,820 Apr 08 - $190,681,520 Apr 01 - $180,750,190 Mar 25 - $153,687,310 Mar 18 - $116,444,830
Worth noting that Insmed's market cap on April 3 2009 would have qualified the Company for eventual RI inclusion even had it dropped 33% from there. But nevertheless the market cap had almost doubled from there by the end of May, when the data is captured which determines the new membership - and had almost trebled from there by June 19, a week before the funds which track the Russell 3000 were due to buy their shares.
Many shareholders at the time assumed that the sustained accumulation was in anticipation of favorable Phase II data from the label expansion study of iPlex as a therapy for MMD. But if that was the justification for the increase in the market cap in 2009, what would that tell us about a reasonable market cap for the Company today, when it is already sitting on Arikace Phase II data which evidences efficacy in an inhaled antibiotic never before seen at Phase II or Phase III?
Q2 2009 -
1. FDA approved (2005) iPlex for Severe short stature - commercialization prohibited in the U.S., development prohibited in Europe.
2. Phase II - iPlex label expansion for MMD - data expected mid-year (disappointed).
3. Approximately $123 million in cash etc.
4. Anticipated cash burn - unknown, pending the outcome of a strategic review.
1. FDA approved (2005) iPlex for Severe short stature - commercialization prohibited in the U.S., development allowed in Europe.
2. Phase II / III - PremIplex for Complications of Prematurity - scheduled completion this December (Premacure study).
3. Phase III due to commence in June - Arikace for CF pulmonary infection.
4. Phase III due to commence in August - Arikace for NTM infection.
5. Clinical, regulatory, laboratory and administrations facility.
6. Approximately $100 million in cash etc.
7. Anticipated cash burn - primarily the following clinical trial expense (including the external and internal costs associated with each study) -
$15 - 20 million - CF / US $20 - 25 million - CF / EU $10 - 12 million - NTM $15 - 20 million - Long term safety
Mar 18 ... $4.69 Mar 25 ... $6.19 Apr 01 ... $7.28 Apr 08 ... $7.68 Apr 15 ... $8.75 Apr 21 ... $9.59 Apr 29 ... $8.71 May 6 .... $8.19 May 13 .. $8.32
The minimum capitalization for the Russell 3000 last year was $112 million. The major indices appear to be up about 20% since then. Insmed's current capitalization is $206.5 million - unless the share price drops to somewhere near $5.50 before May 31 it would appear that Insmed will be included this year.
The buyers for the funds would then have to accumulate the shares required by June 24 - a happy position for anybody holding shares, particularly so when there is such an incentive to hold on to the shares.
2. Eight informative posts for investors new to INSM -