Don't be misled by the opinions of posters such Rehdvm and Terry on the relevance of the recent increase in Vertex's market cap to Insmed. Both of those individuals are somewhat intellectually-challenged, and regrettably unaware of their limitations.
That $5 billion represents the market's increase in the Company's value reflecting future sales of a drug to around 50% of the Cystic Fibrosis population. Had Insmed owned that drug and received the same news, one might expect Insmed's market cap to have increased by $5 billion.
A very rough comparison might be as follows -
The Vertex drug is priced at around $300,000 per patient per year. Arikace is expected to be priced at around $30,000 per patient per year.
As many CF patients will use Arikace as are expected to use the Vertex drug - imo at least 60% compared with 50% for the Vertex drug.
The recent Vertex results were Phase II. One would expect the increase to have been net of a hefty discount - reflecting the chance of failure at Phase III, and the delay represented by the time it will take to conduct the Phase III studies.
The mid-year Arikace results will be pivotal Phase III - and the earlier Phase II results evidence FEV-1 improvement arguably more impressive than in the recent Vertex results.
Assuming the $5 billion increase was a fair reflection of the news, one assumes that had the results been Phase III the news would have warranted an increase in market cap of at least $8 billion.
An 'apples for apples' increase in market cap for Insmed would be calculated as follows -
$8 billion / $300,000 x $30,000 / 50 x 60 = $960 million, an increase of around $30 a share.
Not much. But bear in mind that CF is only the fourth-largest Arikace opportunity. The implications of confirmation of a substantial reduction in bacterial density could deliver a market cap which reflects far greater expectations.
Rehdvm and Terry - if you still don't understand how this works, please don't hesitate to ask questions.
Lord, you are wordy. It would be easier to say that Vertex drug is 10x more expensive than Arikace. Therefore, if VRTX jumped $8B, we would jump $0.8B, or about $26.40 per share on top of where we are now.
You'll never understand until the penny drops with you that others have a different motivation for using this forum.
You are primarily interested in putting up posts which you hope will create the impression that you are knowledgeable. When you're not doing that, you're looking to score points against the those of us here who have exposed you as a charlatan.
As you say, I could have posted a very brief comment on the implications for market cap. But my aim was to contribute something of more use to other investors.