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."
That last comment from Lewis clearly suggests to me that the patients in the Phase III study gained a noticeable improvement in their breathing.
No antibiotic currently available to the CF patient population is able to do that beyond the first therapy phase. Tobi used to, but prolonged use of the drug as a monotherapy has severely reduced its efficacy in recent years. During the Cayston study the maximum improvement in FEV-1 measured for the patients on Tobi was just 2%.
An estimated 30,000 in the US have CF / 35,000 in Europe. 70% of adults are thought to be chronically infected with pseudomonas - but infection from bacteria, including pseudomonas, is a problem from an early age.
If Arikace kills pseudomonas it will kill every other bug susceptible to amikacin. The clinical trial which has just finished involved patients as young as six years.
Predicting the likely demand for Arikace is simply a matter of common sense. Anything which promises to improve the breathing of an individual with CF will be the answer to a prayer.
Wedbush suggests an annual pricing for Arikace of upwards of $36,000 a year. Just 40,000 of that 65,000 with CF using Arikace will generate annual revenue of $1,440,000,000.
A market valuation using a conservative multiple of 5 would be $7.2 billion - $226 a share.
Assuming three years before peak sales are achieved would reduce that to a current valuation of $115 a share.
NTM lung infection, for which there is an ongoing Arikace clinical trial, likely affects 100,000 patients each year in the US and Europe combined. There are currently no approved therapies.
Insmed plans to approach the FDA around the end of this year with the data from all of the Arikace studies, with the target of a label based upon the totality of that data.
The funds asked to sell shares this month will be using these numbers as their starting point - allowing a "bird in the hand" discount.
Be very suspicious of attempts to manage your expectations.
I suspect these guys are playing it safe, with targets within a reasonable distance of the current share price.
Should anything unexpected arrive with the Phase III results it won't be too damaging to their credibility. Expect those targets to be dramatically transformed provided the results are as strong as is generally expected.
For investors new to Insmed - don't overlook the fact that not a single poster who has been arguing that the Russell 3000 inclusion will be a non-event for the share price has been honest enough thus far to offer a direct response to my post on valuation.