Business Overview
Insmed Incorporated is a global biopharmaceutical company on a mission to transform the lives of patients with serious and rare diseases. The company's first commercial product, ARIKAYCE, is approved in the United States, Europe, and Japan for the treatment of nontuberculous mycobacterial (NTM) lung disease caused by Mycobacterium avium complex (MAC).Insmed's pipeline includes clinical-stage programs, brensocatib and treprostinil palmitil inhalation powder (TPIP), as well as other early-stage research programs. Brensocatib is a small molecule, oral, reversible inhibitor of dipeptidyl peptidase 1 (DPP1) that the company is developing for the treatment of patients with bronchiectasis and other neutrophil-mediated diseases. TPIP is an inhaled formulation of the treprostinil prodrug treprostinil palmitil which may offer a differentiated product profile for pulmonary hypertension associated with interstitial lung disease (PH-ILD) and pulmonary arterial hypertension (PAH). Insmed's early-stage research programs encompass a wide range of technologies and modalities, including gene therapy, artificial intelligence-driven protein engineering, protein manufacturing, RNA-end joining, and synthetic rescue.
Financial Performance
In the first quarter of 2024, Insmed reported global net revenues of $75.5 million, representing a 16% year-over-year increase compared to the first quarter of 2023. This growth was driven by strong performance across all three of the company's geographic regions - the United States, Japan, and Europe and the rest of the world.In the US, net revenues for the first quarter of 2024 were $56.3 million, up 15% compared to the prior year quarter. The growth was attributed to the highest level of enrollment forms seen since the third quarter of 2019 when ARIKAYCE was in its fourth quarter of launch and ramping quickly. However, this positive impact was partially mitigated by temporary disruptions to the distribution of ARIKAYCE due to a cyber attack that impacted the dispensing of medicines across the United States.
In Japan, first quarter 2024 net revenue was $14.9 million, representing 13% growth over the same quarter last year. The impact of changes in the foreign exchange rate on revenue in Japan was notable, as the year-over-year growth would have been approximately 27% if average exchange rates were the same as in the first quarter of 2023.
Net revenue in Europe and the Rest of the World came in at $4.3 million in the first quarter of 2024, up 42% compared to the same quarter last year and ahead of the company's internal expectations. While the relative contribution to global sales from Europe is expected to remain modest, Insmed is pleased to see the region's efforts gaining momentum, especially as the company prepares for the potential launch of brensocatib.
For the full year 2024, Insmed is reiterating its global revenue guidance of $340 million to $360 million. This guidance represents 15% growth compared to 2023, which is consistent with the 16% year-over-year growth delivered in the first quarter.
Insmed's gross-to-net ratio in the US was approximately 21% in the first quarter of 2024, which is in line with historical performance. The company expects the gross-to-net ratio to settle in the mid- to high-teens range for the full year. Cost of product revenues for the first quarter of 2024 was $17.5 million or 23.1% of revenues, also consistent with the company's historical performance.
Research and development (R&D) expenses for the first quarter of 2024 were $121.1 million, while selling, general, and administrative (SG&A) expenses were $93.1 million. These expenses reflect Insmed's continued investment in its early and mid- to late-stage pipelines, as well as launch readiness activities for brensocatib.
For the full year 2023, Insmed reported annual net income of -$749,567,000, annual revenue of $305,208,000, annual operating cash flow of -$536,247,000, and annual free cash flow of -$549,535,000.
Pipeline Updates
ARIKAYCE
Insmed announced positive topline results from the ARISE trial in the third quarter of 2023. Based on these results, the company has proposed to the FDA that the change of the respiratory score derived from the Quality of Life – Bronchiectasis (QOL-B) respiratory domain patient-reported outcome (PRO) be the primary endpoint for the ENCORE study, the second trial in Insmed's post-marketing confirmatory clinical trial program for ARIKAYCE.In January 2024, Insmed reached its original target enrollment of 250 patients in the ENCORE trial in patients with newly diagnosed or recurrent nontuberculous mycobacterial lung infection caused by MAC who had not started antibiotics. Enrollment in the study remains ongoing, and the company anticipates reporting topline data in 2025.
Brensocatib
Insmed completed enrollment of adult patients in the Phase 3 ASPEN trial of brensocatib in bronchiectasis in the first quarter of 2023. The company anticipates sharing topline data from the ASPEN trial in the latter half of the second quarter of 2024.Insmed is also advancing commercial readiness activities in preparation for a potential launch of brensocatib for patients with bronchiectasis, if approved. The company anticipates a launch in the US in mid-2025, followed by launches in Europe and Japan in the first half of 2026.
TPIP
In May 2024, Insmed reported topline safety data and certain exploratory efficacy endpoints from the Phase 2 study of TPIP in patients with PH-ILD. Based on these results, the company is advancing toward discussions with global regulatory authorities on the design of a Phase 3 study in PH-ILD, which it anticipates initiating in 2025.Enrollment in the Phase 2 study of TPIP in PAH remains ongoing, and Insmed anticipates topline results in 2025.
Risks and Challenges
Insmed faces several risks and challenges, including the potential failure to continue to successfully commercialize ARIKAYCE, the company's only approved product, in the US, Europe, or Japan. Uncertainties or changes in the degree of market acceptance of ARIKAYCE by physicians, patients, third-party payers, and others in the healthcare community could also impact the company's performance.Additionally, Insmed's inability to obtain full approval of ARIKAYCE from the FDA, including the risk that the company will not successfully or in a timely manner validate a patient-reported outcome tool and complete the confirmatory post-marketing clinical trial required for full approval, poses a significant risk.
The company also faces the challenge of developing unexpected safety or efficacy concerns related to ARIKAYCE, brensocatib, TPIP, or its other product candidates, which could negatively impact their commercial potential.