Current market cap -
$265,491,230 ... Closing price May 11 $8.35 - Shares outstanding 31,795,357
Estimated market cap if Arikace becomes the gold standard antibiotic for Cystic Fibrosis -
$6,300,000,000 ... 60% of 70,000 patients paying $30,000 per year - using a price/sales multiple of 5
None of the dogs in the recently-concluded drug-only phase of the nine-month toxicity study had any abnormal growth. Two of the one hundred and twenty rats which received twice the clinically-relevant dose daily for two years developed a single lung tumour.
The final patient participating in the pivotal CF EU clinical trial has just completed the on-drug phase. Top-line results are due to be released mid-year. Data from several Phase II studies evidenced a level of efficacy far higher than is likely to be necessary to meet the key outcome measures in the current EU study.
Additional near-term driver of share price appreciation -
If the closing price on May 31 is $8.25 the Russell 3000 tracker funds must acquire around 3.5 million shares by the end of June. The higher that May 31 closing price, the greater the resulting accumulation necessary in June. Less than 10 million shares are currently held by retail investors.
Potential approval of Arikace for wider use -
Amikacin injection is already approved by the FDA for the treatment of serious infections caused by susceptible gram-negative bacteria. Arikace is likely to eradicate amikacin-susceptible bacteria causing pneumonia two days earlier than is possible with any antibiotic delivered via the bloodstream.
The FDA co-chairs the Interagency Task Force on Antimicrobial Resistance, which has as a key objective the more efficient use of antibiotics. The NIAID (the NIH is also a co-chair) proposed and is currently running a separate Arikace clinical trial in NTM lung infection (results due later this year).
Estimated accumulation this month by the Russell 3000 tracker funds -
FAMC = Float-adjusted market cap
RTFH = Russell 3000 tracker fund holding dollar value
7,845,647 shares were restricted on May 31 2011
24,833,301 - 7,845,647 = 16,987,654 adjusted float
May 31 2011 ..... 16,987,654 x $10.72 = $182,107,500 FAMC
June 24 2011 ..... 3,500,000 x $12.00 = $42,000,000 RTFH
1,765,271 shares were restricted on May 31 2013
31,795,357 - 1,765,271 = 30,030,086 adjusted float
May 31 2013 ..... 30,030,086 x $13.42 = $403,003,750 FAMC
June 2013 anticipated RTFH ..... $42,000,000 / $182,107,500 x 403,003,750 = $92,945,963
My estimate of a holding of 3.5 million shares in 2011 is based upon the number of shares traded on the evening of the subsequent delisting in June 2012 - 7,146,669. My best guess is that each share was initially counted twice - once for the sale from the tracker fund to the agent, and once for the sale from the agent to a prearranged buyer.
Nasdaq now shows the total trades for that day as 3,399,678. The total showing a minute before the Close that day was 232,257.
One assumes the number of shares the funds will need to buy this month will depend upon a prearranged purchase price, e.g. $15 x 6 million, or $30 x 3 million etc.
The May 31 Short position of around 2 million shares may also have implications for the demand over the next couple of weeks. Yesterday, unlike most stocks, the share price was firmly in the green all day - until with about an hour to go somebody sold enough shares in the space of a few minutes to drop the share price by over 5%.
If these guys really did know something I somehow doubt they'd still be using the share price to scare retail investors and keep them on the sidelines. Why have they sold so many shares for less than $13 instead of waiting for the tracker fund accumulation to drive the price above $20 before selling?
Correction of my info on the Phase III timeline:
"The final patient participating in the pivotal CF EU clinical trial has just completed the on-drug phase. "
should have read -
""The final patient participating in the pivotal CF EU clinical trial has just completed the final off-drug phase. "
The final data collection occurred on May 6.
The New Drug Application timeline
Insmed intends to initiate discussion with the FDA around the end of this year - at which point, in addition to the pre-clinical data and the data from earlier Phase II studies in Cystic Fibrosis and Non-CF bronchiectasis, the Company should be able to supply data from the current CF and NTM studies, and the NTM expanded Access Program due to start in H2, involving -
250-plus Cystic Fibrosis patients treated with Arikace (four weeks on / four weeks off) for a minimum of twelve months (some for eighteen months) and
100-plus NTM patients treated with Arikace continuously for a minimum of twelve weeks (some for twenty-four weeks).
The Company's objective is US and EU labels for Arikace supported by the totality of that data.
The FDA has been approving drugs on the basis of data from sufficiently-rigourous foreign clinical trials for years, and it's worth bearing in mind the FDA's new resolve to expedite the availability of antibiotics targeted at pathogens with the potential to pose a serious threat to public health.
From an article last year -
Senior FDA officials say the agency is committed to rapidly replacing infeasible requirements for antibiotics with pragmatic standards based on the realities of clinical practice at a pace commensurate with the public health threat posed by rapidly evolving pathogens.
FDA is going to "reboot our effort," said Janet Woodcock, director of the Center for Drug Evaluation and Research (CDER). "It is not going to be on my watch that we fail to develop antibiotics for the next generation of bugs," she told BioCentury.
Rachel Sherman, associate director of CDER's Office of Medical Policy, stressed the public health mandate during an interview on BioCentury This Week television (see BioCentury This Week, Nov. 18).
"The slowdown in development of these products is a public health crisis of the greatest magnitude," she said. "We at the agency are aware of that, and we are on top of it ..."
Ownership breakdown at the end of Q1 -
31,571,806 shares outstanding on March 28, 2013 (per the DEF 14A)
13,319,722 reported via SEC filings for Q1, including -
..... 4,719,290 - FMR
..... 2,433,319 - RA Capital
..... 1,139,740 - Bessemer Venture Partners
8,711,386 last known holdings of non-reporting former Transave stockholders (see the DEF 14A for the holdings of the first three) -
..... 2,927,094 - Quaker BioVentures
..... 1,915,122 - TVM Life Science Ventures
..... 1,888,165 - Prospect Venture Partners
..... Unknown - Forbion Capital Partners
..... Unknown - Easton Hunt Capital Partners
(the last two still list Insmed in their portfolios)
22,031,108 held by institutions
9,540,698 held by retail (including directors)
I've no idea what Terry was hoping to gain by lying about the anticipated release of the number of patients in the Phase III clinical trial who volunteered for the long term safety study, but it would be wasteful to ignore a good excuse to "bump" an informative post.
1. From the Seeking Alpha transcript of the May 7 earnings call -
Joseph Schwartz - Leerink Swann
"Good morning. I was wondering if you could give us any more insight into the proportion of patients that you see transitioning from the randomized control portion of CLEAR-108 into the extension study."
"Yes. Good morning, Joe. Thanks for the question. Actually, this is going to be one of those frustrating calls this morning because we have data that is just around the corner. We just are not going to be in the position to disclose it until it's finalized.
With respect to this particular issue of carry-over, while we had last patient, last visit yesterday, we would like to see the final definitive number so we can just come out and state it. And I anticipate that we would do that in the not-too-distant future by way of some form of disclosure, perhaps at the UBS Conference, if we know it by then."
2. From the May 13 PR -
"Insmed ... today announced that Will Lewis, President and Chief Executive Officer of Insmed, will be presenting a corporate overview at the UBS Global Healthcare Conference taking place at The Sheraton New York Hotel in New York City from May 20-23, 2013. Mr. Lewis' presentation will take place on Monday, May 20th at 2:00 p.m."
3. From the May 20 presentation -
"We are very excited about the carry-over rate from patients on the treatment portion of the study into the open label study because we think that suggests that not only in the clinical setting is the drug useful to them, but they are interested in continuing treatment for the long term even though there is a heavy burden in staying in these studies as you are all aware."
Has Arikace just demonstrated non-inferior efficacy at Phase III?
Arikace vs Tobi in previous studies -
The presentation of the Arikace Phase II extension study (cycles of 28 days on therapy / 56 days off-therapy) indicates that the change in FEV-1 28 days after the third therapy phase - averaged across 43 patients and relative to their readings at the start of the study - was an increase of about 5%.
It's tempting to wonder if that 5% increase might have been higher had the two earlier off-therapy phases been for only 28 days - as was the case with the recently-completed Arikace EU Phase III study.
But there are 'apples for apples' data available for Tobi, the drug with which Arikace has just been compared, generated in a study of Gilead's Cayston where Tobi was once again the comparator therapy. The primary finding was -
"Patients receiving Cayston had an adjusted mean actual increase from baseline to six months in FEV-1 percent predicted (averaged across three treatment cycles) of 2.05 percent compared to a 0.66 percent decrease for those receiving TIS".
As with the Arikace Phase III study, that Cayston study comprised three cycles of 28 days on therapy / 28 days off therapy.
That key efficacy metric was mean change in FEV-1 across the entire study period. The actual 'apples for apples' data - the change in FEV-1 at the end of the third 28-day off-therapy phase for the approximately 130 participants on Tobi - seems to have ranged from a 1% decrease to a 5% decrease.
Lung function on average at the end of the study was actually worse than it was at the start.
The actual data reported via the June 13 2011 SEC filing from the Arikace multi-cycle CF Phase II extension study was as follows -
"The data demonstrated that ARIKACE, delivered once-daily for 28 consecutive days, followed by 56 days off-treatment, for a total of six cycles, resulted in statistically significant improvement in lung function that was sustained over a 72 week period. Specifically, inhalation of 560 mg of ARIKACE produced a mean increase in pulmonary function (FEV 1 ) of 11.7% at the end of the 28 day treatment period of the sixth cycle ... During the course of the study, FEV 1 improvement was also sustained at the end of 56 days off-treatment in each of cycles one through six, with an estimated relative increase in FEV 1 of 5.7%".
I don't recall seeing data from that study which offered a particularly useful comparison with the main efficacy data from Gilead's Cayston study -
"Patients receiving Cayston had an adjusted mean actual increase from baseline to six months in FEV-1 percent predicted (averaged across three treatment cycles) of 2.05 percent compared to a 0.66 percent decrease for those receiving TIS"
- but the chart in the Insmed presentation does also suggest that FEV-1 measured during the therapy phases increased progressively from the start of the Arikace extension study to peak during the fifth therapy phase at a range from plus 12% to plus 19%.
And it's worth noting once more that those on-therapy phases were separated by breaks of 56 days - twice as long as the off-therapy phases in the Arikace EU Phase III clinical trial from which results are due mid-year.
But even INSMED doesn't mention pneumonia!
Neither do the analysts. Nor do they ever mention Tuberculosis .....
Insmed's US Patent 8226975
Lipid-based compositions of antiinfectives for treating pulmonary infections and methods of use thereof
Publication Date: 07/24/2012
1. A system for treating or providing prophylaxis against a pulmonary infection comprising:
a) a pharmaceutical formulation comprising an aminoglycoside encapsulated in a liposome, wherein the formulation is a solution or a suspension, and wherein a lipid component of the liposome consists of electrically neutral lipids, and
b) an inhalation delivery device capable of generating an aerosol, wherein the aerosol comprises free aminoglycoside in an amount effective to provide immediate bactericidal activity and encapsulated aminoglycoside in an amount effective to provide sustained bactericidal activity.
14. A method for providing prophylaxis against a pulmonary infection in a patient comprising administering an aerosolized pharmaceutical formulation to the lungs of the patient, with the system of claim 1.
33. The method of claim 14, wherein the pulmonary infection is selected from the group consisting of
chronic obstructive pulmonary disease (COPD),
acute bronchial exacerbations of chronic bronchitis (ABECB),
Mycobacterium chelonei abscessus,
infections caused by inhaled agents of bioterror, and
opportunistic fungal infections.
From an article in April -
[Heavily burdened by rising multi-drug-resistant Tuberculosis, China now has nearly 120,000 new cases on the mainland each year, according to public health experts.
That accounts for 25 percent of the world's total per year, according to statistics from the Chinese Center for Disease Control and Prevention.
MDR-TB is defined as TB, which is resistant to isoniazid and rifampicin, the most powerful first-line anti-TB drugs.
"MDR-TB needs more complicated diagnosis methods, longer and much more expensive treatment compared with common TB, which causes huge economic and human resource loss," said Chen Mingting, deputy director of the National Center for Tuberculosis of China CDC.
With no effective intervention, the number of MDR-TB patients in China is expected to reach 710,000 on the mainland by 2020, which would incur an economic loss of more than 99 billion yuan mostly in medical treatment, he said, citing previous studies by CDC.
"That might upset social stability and harm economic development of the nation," he said.
Currently, the Chinese government provides free treatment for common TB but not for MDR-TB, which costs much more for treatment.
To help enrich drug choices for MDR-TB, the State Food and Drug Administration has accelerated the approval process of the new medicine Sirturo, by Xi'an Janssen Pharmaceutical Ltd.]
From the Wiki entry on Sirturo (aka bedaquiline) -
[There is some controversy over the approval for the drug, as the FDA's ruling was based on a surrogate outcome (sputum cultures) as opposed to patient deaths. In the clinical trials used for approval, the patients taking bedaquiline were more likely to die, even though they had resolution of TB based on sputum cultures.]
An injected aminoglycoside (such as amikacin) is equal-first in order of preference of MDR-TB antibiotics.
A significant decrease in bacterial density in the Arikace results due Monday would raise some interesting possibilities.
From a study of China's free antiretroviral treatment program (NFATP) -
"By the end of 2011, a total of 150,692 HIV/AIDS patients had been treated through the NFATP and 122,613 of them were still on treatment. Of all patients, about 72% were enrolled during the past four years."
These individuals are no longer likely to need a therapy for TB. The aim of antiretroviral therapy is to restore the immune function to a level where it once again can suppress pathogens such as Mycobacterium Tuberculosis.
But what it does demonstrate is that the Chinese government is willing to do more than just fund the relatively inexpensive therapeutic regimen for standard TB.
And it's worth pointing out that while funding is a major issue in most countries with TB epidemics, China is estimated to have spent $357 billion on healthcare in 2011 - and is expected to increase healthcare spending to $1 trillion a year by 2020.
While it's undeniable that the overhaul of the Chinese healthcare system will cost a considerable amount of money, one can't help but feel they might see their way to allocating a few million should a therapy emerge which delivers a new level of efficacy in MDR-TB.
"With no effective intervention, the number of MDR-TB patients in China is expected to reach 710,000 on the mainland by 2020."
A stitch in time saves nine?
Arikace pricing for pneumonia -
The Wedbush note last week (see 3) suggested that a two-week course of Arikace would be priced at upwards of $3,000. If a $3,000 course of a more effective aminoglycoside antibiotic reduces the length of inpatient care by two days it will deliver a nett saving to the insurer (see 2).
1. ECCMID April 2012 -
"The addition of a short-course of high-dose aminoglycoside to initial antipseudomonal improve the treatment of healthcare-associated pneumonia by shortening the length of hospital stay, researchers said here at the 22nd European Congress of Clinical Microbiology and Infectious Diseases.
Limited treatment options and delays in empiric therapy for multidrug resistant gram-negative organisms (MDR-Gn) are said to be largely to blame for the unsettling rise in such infections, causing increased lengths of stay, costs, and mortality resulting with infections.
Healthcare-associated pneumonia has been shown to be associated with particularly resistant pathogens, and a combination therapy in which aminoglycoside is added to antipseudomonal beta-lactam has been suggested to improve treatment and resolve symptoms faster than monotherapy.
In testing the efficacy of the combination therapy, researchers evaluated a group of 227 geriatric patients with nursing home acquired pneumonia, in which 104 patients received a combination therapy of antipseudomonal beta-lactam plus aminoglycoside and 123 received beta-lactam therapy without an aminoglycoside between 2009 and 2010.
The results showed that the combination aminoglycoside therapy group had a mean length of stay that was 1.83 days shorter than the non-combination therapy group, resulting in lower overall inpatient costs."
2. "From 2000 to 2005, critical care medicine costs per day increased by 30.4% (from $2698 to $3518)."
3. "We note there is additional upside to our market estimates should ARIKACE pricing come in higher than our estimated $6000/cycle estimate."
Worth pointing out a particularly inept recent attempt to deceive new investors -
"Pneumonia is different from lung infection. Pneumonia has exudate and "junk" in the alveoli and airways. The antibiotic has to penetrate into mass and the exudate and "junk" has to be cleared from the lungs. Infection (like what Arikace is used to treat) is just bacterial living in the biofilm and macrophages. There is no significant amount of debris to be cleared."
Information from Insmed's 10-K paints a different picture -
"We believe ARIKACE has the potential to deliver high levels of amikacin directly to the site of bacteria in the lung for a sustained period of time, which we expect would differentiate it from other marketed drugs for the treatment of chronic Pseudomonas lung infections in CF patients.
Current inhaled antibiotics are commonly used as standard treatments for CF patients with Pseudomonas lung infections and generally are thought to be a way to deliver more drug directly to the site of infection as compared with other methods of delivery. However, CF patients seldom clear the Pseudomonas permanently from their lungs, in part because of the thick sticky mucus these patients produce in their lungs, and often become chronically infected despite existing antibiotic treatments.
All existing aminoglycoside antibiotics, including tobramycin and amikacin, are positively charged and tend to bind to the negative surfaces of mucus and the biofilm. In contrast, we have designed ARIKACE to be a neutrally charged liposome, which has been shown in laboratory studies, to penetrate both CF mucus and a Pseudomonas biofilm.
This means that ARIKACE may reach the site of the Pseudomonas infection in CF patients' lungs more efficiently than the other currently available aminoglycoside antibiotics, including currently available inhaled antibiotics."
Another patent has been granted by the European Patent Office, preventing unlicensed use of Insmed's inhaled liposome technology in the European countries for which it remains valid until 2026 -
EP1909759 - Sustained release of anti-infective aminoglycosides
From the record of the corresponding US patent -
93. A liposomal aminoglycoside formulation comprising a liposome having a lipid bilayer and an aminoglycoside encapsulated therein, wherein the lipid bilayer comprises a neutral phospholipid and a sterol, the amount of lipid by weight is twice the amount of aminoglycoside or less by weight, and the liposome has a mean diameter of 0.1 microns to 0.5 microns.
106. A method of treating a patient for a pulmonary infection comprising administering to the patient a therapeutically effective amount of the liposomal aminoglycoside formulation of claim 93.
107. The method of claim 106, wherein the pulmonary infection is a
FDA approval of Arikace for CF and pneumonia?
A physician treating a patient for pneumonia has to ensure that the concentration of antibiotic in the bloodstream rises to a level which optimises the rate at which the antibiotic moves from the bloodstream into the interstitial fluid in the lungs, while keeping the bloodstream concentration sufficiently low to prevent damage to kidneys and other organs.
The bloodstream concentration must be maintained at that optimum level until such time as the concentration induced in the interstitial fluid has been high enough for long enough to induce a sufficiently high concentration of antibiotic in the accumulation of dead cells etc at the junction of interstitial fluid and airways which harbours most of the pathogens.
Health authorities Worldwide have been warning for years now about antimicrobial resistance - the proliferation of strains of bacteria which have developed with immunity to antibiotics. The primary mechanism for the development of antimicrobial resistance is nonfatal exposure of bacteria to antibiotics. Given that pneumonia is a major area of antibiotic use it doesn't take a genius to work out that treating pneumonia with antibiotics delivered via the bloodstream has been a major contributor to the problem.
A recent report revealed that there are only seven new drugs in development targeted at drug-resistant bacteria. Even assuming that some of those survive the clinical trial process, none may be effective against the bacteria posing the biggest potential threat to public health - CRE for example, which is not only resistant to carbapenems but has the ability to transfer that resistance to other types of bacteria.
How can the FDA, NIH, CDC etc not be aware that delivery of antibiotics to pulmonary infections via inhaled liposomes would be a major weapon in their efforts to combat the threat of antimicrobial resistance?
Fwiw - this recent comment by Lewis seems to support the theory that the treatment of pulmonary infections by injected antibiotics has been allowing pathogens time to develop resistant strains -
"IV amikacin is used to treat this patient population right now. You can't get enough amikacin into the lung through IV to successfully address this disease".
From the legislation Obama signed into law last year in response to the threat to public health posed by antimicrobial resistance -
"The Secretary shall designate drugs as qualified infectious disease products under subsection (d) prior to the promulgation of regulations under this subsection, if such drugs meet the definition of a qualified infectious disease product described in subsection (g).
'(g) Qualified Infectious Disease Product- The term 'qualified infectious disease product' means an antibacterial or antifungal drug for human use intended to treat serious or life-threatening infections, including those caused by--
..... '(1) an antibacterial or antifungal resistant pathogen, including novel or emerging infectious pathogens; or
..... '(2) qualifying pathogens listed by the Secretary under subsection (f).'.
'(f) Qualifying Pathogen-
..... '(1) DEFINITION- In this section, the term 'qualifying pathogen' means a pathogen identified and listed by the Secretary under paragraph (2) that has the potential to pose a serious threat to public health, such as--
.......... '(A) resistant gram positive pathogens, including methicillin-resistant Staphylococcus aureus, vancomycin-resistant Staphylococcus aureus, and vancomycin-resistant enterococcus;
.......... '(B) multi-drug resistant gram negative bacteria, including Acinetobacter, Klebsiella, Pseudomonas, and E. coli species;
.......... '(C) multi-drug resistant tuberculosis; and
.......... '(D) Clostridium difficile."
Amikacin injection is approved by the FDA to treat serious infections caused by any of the four pathogens listed in B above - and is routinely used off-label for infections caused by C above.
Note that all five are listed as targets in Insmed's patents.
I believe the federal task force has far bigger plans for Arikace than the treatment of patients with CF and NTM lungs infection.