• Recall, INSM recently announced the completion of CLEAR-108, their Phase
III trial of ARIKACE. The study enrolled 302 patients (in EU & Canada),
randomized 1:1 to either once daily 560mg ARIKACE or twice-daily TOBI. The
primary endpoint of the trial is a relative change in FEV1 from baseline and the
study is greater than 80% powered to demonstrate non-inferiority. Key secondary
endpoints include change in pulmonary function & time to pulmonary exacerbation.
• Reiterating our OUTPERFORM rating and increasing our price target to $18
from $11. We arrive at our $18 price target by applying an 8x multiple to our
ARIKACE sales estimates in the US and EU in 2017, discounted back 25%
annually. We also arrive at our price target by applying a 20x multiple to our fullytaxed
(40% tax rate) 2018 EPS plus cash per share discounted back 25% annually.