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Insmed Incorporated Message Board

  • fudfighter4 fudfighter4 Nov 15, 2012 12:18 PM Flag

    What prompted FMR to buy two million shares recently?

    FMR has now reported its position as at September 30 - 1,881,752 shares. This represents the shares owned for some time by the two Beacon Bioventures subsidiaries alone.

    The number reported is for "shares held", as opposed to "shares owned". It would seem that FMR went on a buying spree some time after September 30, acquiring over two million shares in INSM over the last six weeks on behalf of the third-party funds it manages.

    That FMR fund manager doesn't seem to be overly worried about the possibility of INSM falling over a fiscal cliff. I'm inclined to attach more importance to his actions that I do to Bizarro Boy's bloviation.

    The guidance from Lewis that Bronchiectasis represents a target population of around 200,000 is truly staggering, given that Insmed already has a Phase II study in the bag on that one. From September 2009 -

    Results were presented today at the European Respiratory Society Meeting in Vienna, Austria by Anne E. O'Donnell, MD, Professor of Medicine and Chief of the Division of Pulmonary, Critical Care and Sleep Medicine, Georgetown University Hospital, and co-lead investigator of the study.

    The double-blind, placebo-controlled study was designed to evaluate ARIKACE in non-CF patients who have bronchiectasis with Pseudomonas lung infections. Sixty-four adult patients were randomized to receive ARIKACE - either 280 mg or 560 mg daily dosages - or placebo. Patients received 28 days of therapy followed by a 28-day off-treatment observation period. ARIKACE and placebo were administered once daily using an eFlow (R) Nebulizer System (PARI Pharma GmbH), a novel, highly efficient, portable aerosol delivery system. Sixteen clinical sites throughout Europe and India participated in the study.

    "The positive efficacy and tolerability profile demonstrated by ARIKACE in this study is encouraging for non-CF bronchiectasis patients that have pseudomonas lung infections and for physicians who treat them," said Dr. O'Donnell. "These successful results with ARIKACE are especially important since there is nothing currently approved to treat bronchiectasis patients with these types of infections."

    If Arikace is deemed safe, and the FDA does approve it as a therapy for Cystic Fibrosis on the basis of the data from the ongoing Phase III study in Europe, I believe there's a very real possibility the FDA will also use its powers under the new legislation to approve Arikace as a therapy for Bronchiectasis on the basis of the data from the Phase II study.

    In NTM and Bronchiectasis combined there is a US target population of around 250,000. Arikace, if approved, would have no real competition for that combined target population.

    If Insmed supplies six months of Arikace therapy to 250,000 patients at a price of $40,000 per patient it will generate annual revenue of $10 billion. A market valuation of four times sales would equate to a share price of $12,846.28 on shares currently outstanding.

    Although there may be additional shares issued to finance the roll-out of the commercialisation phase, we shouldn't discount the possibility of the Company simply taking on short-term debt.

    Some here will doubtless risk a hernia in their haste to ridicule the apparent suggestion of a 100% market penetration for a single therapy. But that 250,000 doesn't include the CF opportunity. It doesn't include the use of Arikace in hospital-aquired pneumonia. And it doesn't include the use of Arikace for those indications elsewhere in the World than the US - or its use in the treatment of multi-drug-resistant Tuberculosis in HIV/TB co-infection.

    Here's a reminder of the "leading biotech" revenues and market caps I posted recently. I don't think that comment from Sharoky was just hype.

    Revenue ($) ......... Market cap ($) ... Multiple ... Company

    58,148,000,000 ... 187,633,438,080 ... 3.23 ... Pfizer, Inc.
    65,900,000,000 ... 187,396,076,770 ... 2.84 ... Johnson & Johnson
    57,212,000,000 ... 152,400,000,000 ... 2.66 ... Novartis AG
    49,240,000,000 ... 138,941,731,840 ... 2.82 ... Merck & Company, Inc.
    39,228,400,000 ... 108,723,459,520 ... 2.77 ... Abbott Laboratories

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    • Oops - apologies for the typo.

      "A market valuation of four times sales would equate to a share price of $12,846.28 on shares currently outstanding."

      - should have read -

      "A market valuation of four times sales would equate to a share price of $1,284.62 on shares currently outstanding."

      $40,000,000,000 / 31,137,403

      I don't know enough about the Bronchiectasis opportunity as yet to know if it's a condition which requires long-term therapy.

      The four weeks on / four weeks off cycle applies only to conditions such as Cystic Fibrosis where the patient is permanently susceptible to pulmonary bacterial infection. Drug rotation is recommended due to the risk of resistant strains developing when an individual drug is in continuous use in a prolonged regimen.

      A six-month course of continuous therapy to clear an infection (the period of therapy recommended to clear TB infection) would equate to the same revenue for Arikace as would be the case in a prolonged regimen of four weeks on / four weeks off.

      • 2 Replies to fudfighter4
      • Here's an extract from S.3187, the new legislation Obama signed into law in July this year -

        "As a result of these remarkable scientific and medical advances, the FDA should be encouraged to implement more broadly effective processes for the expedited development and review of innovative new medicines intended to address unmet medical needs for serious or life-threatening diseases or conditions, including those for rare diseases or conditions, using a broad range of surrogate or clinical endpoints and modern scientific tools earlier in the drug development cycle when appropriate. This may result in fewer, smaller, or shorter clinical trials for the intended patient population or targeted subpopulation without compromising or altering the high standards of the FDA for the approval of drugs."

        Could this new provision for an expedited development and review on the basis of fewer, smaller, or shorter clinical trials have any relevance to the fact that the FDA has already analysed data from a 2009 Arikace Phase II clinical trial involving sixty-four patients with bronchiectasis infected with Pseudomonas - a condition for which there is no FDA-approved therapy?

        (Early in the course of the process which culminated in the FDA lifting the Clinical Hold on the Arikace programs, the FDA requested all of the Arikace study data available at that point.)

        And for those who haven't seen it, here's the info from the recent SEC filings which confirms that FMR has purchased at least two million additional shares since September 30 -

        September 30 -

        FMR beneficial ownership - 1,881,752

        October 25 -

        Beacon Bioventures LP - 1,869,084
        Beacon Bioventures Principals LP - 12,668
        Fidelity Management & Research Company - 1,457,800

        FMR beneficial ownership - 3,339,552

        November 8 -

        Beacon Bioventures LP - 1,869,084
        Beacon Bioventures Principals LP - 12,668
        Fidelity Management & Research Company (?) - 2,118,900

        FMR beneficial ownership - 4,000,652

      • I have a friend with Broncheictasis, and it does require long-term therapy, although this person tries to avoid taking antibiotics as much as possible.

        Sentiment: Strong Buy

    • Fud, would you clarify that $40,000 per patient be for a 6 months supply or a 12 months, or is it actually for a 6 month supply considering there is a month off between 28 day therapies?

      • 1 Reply to tomhudson2000
      • Here is the pricing info I posted recently from the Cystic Fibrosis Services site -

        TOBI, 56 ampules - $5,776.40

        Cayston, 84 vials - $5,844.68

        In each case the price is for a four-week supply - an annual pricing (four weeks on therapy / four weeks off therapy) of $37,546 and $37,990 respectively.

        That annual pricing is for six months of therapy spread over a period of a year, so it would equate to six months of continuous therapy for NTM or bronchiectasis.

        Tim guided earlier in the year -

        "If you look in cystic fibrosis patients who have Pseudomonas lung infections that are treated with inhaled antibiotics, the pricing for the Tobis and the Caystons of the world are in that kind of $4000 to $5000 range. And if we potentially at some point get an indication within - you know, there's inhaled antibiotics for treating those patients - you would expect that we would be competitive in our pricing."

        I don't know if it was a while since he checked. More likely perhaps is that he was allowing for some sort of discount. However -

        "We view NTM differently. While we don't have exact pricing, and it's way too early, we think the price point in NTM is potentially significantly higher for those patients than it is in CF."

        "Significantly higher" than $5,000 for a four-week course ($32,500 for six months) would get us to $40,000 imo.

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