Executive Summary / Key Takeaways

• Insmed Incorporated is undergoing a significant transformation, evolving from a single-product company to a multi-product biopharmaceutical leader, driven by the successful U.S. launch of BRINSUPRI and the sustained growth of ARIKAYCE.
• BRINSUPRI's initial U.S. launch generated $28.1 million in net sales in its first partial quarter (Q3 2025), with broad physician prescribing and positive payer reception, setting the stage for potential blockbuster status and international expansion into Europe, the U.K., and Japan in 2026.
• ARIKAYCE continues its robust performance, with Q3 2025 revenue up 22% year-over-year to $114.3 million, and 2025 global net revenue guidance raised to $420 million to $430 million, supported by strong international growth and the anticipated ENCORE trial readout in H1 2026 for label expansion.
• A deep and diverse pipeline, including brensocatib in CRSsNP and HS, and TPIP in PH-ILD, PAH, PPF, and IPF, alongside promising gene therapy and next-generation DPP1 inhibitor programs, offers numerous near-term clinical catalysts and significant long-term growth opportunities.
• The company maintains a strong financial position with approximately $1.7 billion in cash, cash equivalents, and marketable securities as of September 30, 2025, strategically deploying capital to fund its pipeline and commercialization efforts with a clear path toward becoming cash-flow positive.

A New Era of Growth: Insmed's Strategic Evolution

Insmed Incorporated, founded in 1999, has historically focused on the arduous journey of research and development, enduring net operating losses for most of its history prior to 2019. The company's foundational mission is to deliver first- and best-in-class therapies to patients facing serious diseases. This long-term commitment began to yield significant commercial success with the U.S. accelerated approval and subsequent launch of ARIKAYCE in late 2018 for refractory Mycobacterium avium complex (MAC) lung disease. This pivotal moment marked Insmed's transition into a commercial entity, a journey that has now culminated in its emergence as a multi-product biopharmaceutical company.

Insmed's strategic evolution is underpinned by a robust and diversified pipeline, significantly bolstered by targeted acquisitions. The company expanded its capabilities through the acquisition of a proprietary protein deimmunization platform in March 2021, followed by Motus Biosciences, Inc. and AlgaeneX, Inc. in August 2021, bringing preclinical gene therapy programs into its fold. Further strengthening its gene therapy efforts, Insmed acquired Vertuis Bio, Inc. in January 2023 and Adrestia Therapeutics Ltd. in June 2023, adding a synthetic rescue research platform. These strategic moves have diversified Insmed's early-stage portfolio to over 30 preclinical programs, encompassing gene therapy, AI-driven protein de-immunization, RNA end-joining, synthetic rescue, and next-generation DPP1 inhibitors.

Technological Edge: Driving Differentiated Therapies

Insmed's competitive advantage is significantly rooted in its differentiated technological platforms, which enable the development of novel therapies for complex diseases.

Pulmovance Technology: Targeted Inhaled Delivery

ARIKAYCE, Insmed's first commercial product, leverages the proprietary Pulmovance technology. This innovative system utilizes charge-neutral liposomes to deliver amikacin directly to the lungs, the primary site of MAC infection. The tangible benefits of this technology are twofold: it prolongs the release of amikacin in the lungs while minimizing systemic exposure. This targeted delivery mechanism is designed to enhance efficacy at the site of infection and reduce systemic toxicities often associated with intravenous amikacin. The ability to deliver high levels of amikacin directly to lung macrophages, where MAC infections reside, distinguishes ARIKAYCE from conventional treatments. This technological differentiation has been critical to ARIKAYCE's market acceptance and its inclusion in international treatment guidelines for NTM lung disease.

DPP1 Inhibition: A Novel Pathway for Neutrophil-Mediated Diseases

BRINSUPRI (brensocatib) represents a significant technological leap as a small molecule, reversible inhibitor of dipeptidyl peptidase 1 (DPP1). DPP1 is an enzyme responsible for activating neutrophil serine proteases (NSPs), which are implicated in various inflammatory diseases. By inhibiting DPP1, brensocatib aims to decrease the damaging effects of excessive active NSPs in conditions like bronchiectasis, chronic rhinosinusitis without nasal polyps (CRSsNP), and hidradenitis suppurativa (HS). This mechanism offers a novel approach to treating neutrophil-mediated inflammation, a pathway not extensively addressed by existing therapies. The company's research team is actively developing next-generation DPP1 inhibitors, with the first candidates expected to enter the clinic in 2026. These molecules are being designed to target other large patient populations with unmet needs, such as rheumatoid arthritis, inflammatory bowel disease, and potentially COPD, further expanding the therapeutic reach of this innovative mechanism.

Intrathecal Gene Therapy: Precision Delivery for Genetic Disorders

Insmed's gene therapy programs, particularly for Duchenne Muscular Dystrophy (DMD) with INS1201 and Amyotrophic Lateral Sclerosis (ALS) with INS1202, employ an intrathecal delivery approach. This method is designed to deliver gene therapy directly into the cerebrospinal fluid, offering several key benefits over intravenous delivery. It has the potential to target both skeletal and cardiac muscles at lower doses, thereby reducing the overall viral load and potentially mitigating systemic immune reactions, particularly the first-pass liver effect often associated with intravenous gene therapies. Preclinical models have shown remarkable transduction efficiency in muscle and cardiac tissue via this route. For Stargardt disease, Insmed is applying its proprietary RNA end-joining technology, which enables the construction of larger transgenes in situ within the body, a crucial innovation for genetic disorders requiring longer protein sequences.

These technological differentiators collectively contribute to Insmed's competitive moat, allowing it to develop first- and best-in-class therapies. The ability to offer targeted, potentially more effective, and better-tolerated treatments translates into stronger market positioning, premium pricing opportunities, and sustained revenue growth in its specialized rare disease markets.

Competitive Landscape: Niche Focus Against Giants

Insmed operates in a competitive biopharmaceutical landscape, primarily focusing on rare and serious diseases. Its competitive positioning is characterized by a niche focus and technological innovation, contrasting with larger, more diversified pharmaceutical companies.

Direct competitors include industry giants like Vertex Pharmaceuticals (VRTX), AstraZeneca (AZN), Novartis (NVS), and Gilead Sciences (GILD). These companies have extensive resources, broader portfolios, and established global footprints. For instance, Vertex leads in cystic fibrosis treatments, while AstraZeneca and Novartis have significant presences in respiratory and immunology. Gilead specializes in antiviral and respiratory therapies.

Insmed's strength lies in its agility and specialized approach. Unlike Vertex, which has a strong but concentrated portfolio in genetic diseases, Insmed's ARIKAYCE offers a unique inhaled antibiotic for MAC lung disease, a specialized approach that may enhance patient adherence and efficacy. Against AstraZeneca's broader respiratory offerings, Insmed's brensocatib provides a targeted DPP1 inhibition mechanism for neutrophil-mediated diseases, potentially offering a simpler and more effective treatment for specific inflammatory pathways. While Novartis and Gilead boast extensive R&D pipelines and global reach, Insmed's focused R&D on rare diseases and its proprietary delivery technologies (like Pulmovance and intrathecal gene therapy) allow it to carve out distinct market segments with high unmet needs.

However, Insmed faces vulnerabilities due to its comparatively narrower product portfolio and smaller operational scale. This can lead to higher costs per unit and increased revenue volatility if a key product encounters regulatory or market challenges. Larger competitors benefit from greater financial stability, more diversified revenue streams, and established efficiencies in R&D and commercialization. For example, while Insmed's gross profit margin (TTM) is 69.97%, its operating and net profit margins are significantly negative (-272.06% and -264.83%, respectively), reflecting its heavy investment phase. This contrasts with more established competitors who typically exhibit positive and stable profitability margins.

Indirect competition also poses a threat, particularly from generic manufacturers and companies leveraging AI for accelerated drug discovery. These could introduce cheaper alternatives or faster-developed competing therapies, intensifying pricing pressures. Insmed's strategy to mitigate these risks includes expanding its U.S. manufacturing footprint for brensocatib and focusing on first-in-class or best-in-class therapies where its technological advantages can command premium pricing and market exclusivity.

Financial Performance and Liquidity: Fueling Future Growth

Insmed's financial performance in recent periods reflects its strategic investments in commercialization and pipeline development, alongside the sustained growth of its flagship product, ARIKAYCE, and the initial impact of BRINSUPRI.

For the three months ended September 30, 2025, Insmed reported net product revenues of $142.34 million, a substantial 52.4% increase compared to the same period in 2024. This growth was primarily driven by the initial U.S. commercial sales of BRINSUPRI, contributing $28.05 million, and a robust 22.3% year-over-year growth in global ARIKAYCE sales, reaching $114.29 million. International ARIKAYCE sales, in particular, demonstrated impressive momentum, growing 51.8% year-over-year.

Despite revenue growth, the company continues to operate at a loss, with a net loss of $370.02 million for Q3 2025 and $948.29 million for the nine months ended September 30, 2025. Total operating expenses for Q3 2025 surged to $508.35 million from $306.85 million in Q3 2024. This increase was largely influenced by a $104.65 million change in the fair value of deferred and contingent consideration liabilities, primarily due to an increase in Insmed's share price. Research and development (R&D) expenses rose by 23.6% to $186.42 million in Q3 2025, while selling, general, and administrative (SG&A) expenses increased by 56.7% to $186.38 million. These increases reflect significant investments in BRINSUPRI's commercial launch, pipeline advancement, and increased headcount.

Cost of product revenues, excluding amortization of intangible assets, increased by 38.7% to $29.37 million in Q3 2025, commensurate with higher sales. Notably, the cost of product revenues as a percentage of net revenues decreased to 20.6% from 22.7% in the prior year, benefiting from BRINSUPRI's lower manufacturing costs. This positive trend is expected to continue through 2025 and 2026 as inventory expensed prior to BRINSUPRI's FDA approval is sold.

Insmed maintains a strong liquidity position, with approximately $1.7 billion in cash, cash equivalents, and marketable securities as of September 30, 2025. This robust cash balance was significantly bolstered by a June 2025 underwritten public offering that generated $823.3 million in net proceeds. The company also strategically managed its debt, with the 0.75% Convertible Senior Notes due 2028 largely converted into common stock and redeemed in Q2 2025, reducing long-term debt to $539.72 million from $1.10 billion at year-end 2024.

Net cash used in operating activities for the nine months ended September 30, 2025, was $687.42 million, an increase from $487.90 million in the prior year, primarily due to the increased net loss and higher operating expenses. Management anticipates that BRINSUPRI's revenue growth will eventually offset increased spending, leading to progressively smaller quarterly operating cash outflows and a path toward becoming cash-flow positive.

Outlook and Strategic Catalysts

Insmed's near-term future is packed with significant commercial and clinical catalysts that are poised to drive substantial growth and value creation.

BRINSUPRI: A Blockbuster in the Making

The U.S. launch of BRINSUPRI for non-cystic fibrosis bronchiectasis (NCFB) is a primary focus. Despite being early in the launch, with only six weeks of sales reported in Q3 2025, the initial reception has been positive, with $28.1 million in net sales. Approximately 2,550 new patients have started treatment, and around 1,700 physicians have written at least one prescription. Management anticipates "high double-digit million sales for Brensupri in the upcoming quarters" and aims for it to be "in the conversation with some of the strongest respiratory launches the industry has ever seen," which historically produced high double-digit millions in their first two full quarters combined. The company is pursuing a "frictionless launch" strategy, engaging with payers to establish clear and convenient prior authorization and reauthorization requirements. The U.S. list price is expected to be in the upper half of the $40,000 to $96,000 range. Internationally, the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for BRINSUPRI in October 2025, with an EMA decision expected by year-end 2025 and potential EU launch in early 2026. Regulatory filings are also progressing in the U.K. and Japan, with anticipated launches in 2026.

ARIKAYCE: Expanding Reach and Sustaining Growth

ARIKAYCE continues to be a strong revenue driver, with 2025 global net revenue guidance raised to $420 million to $430 million, representing 15% to 18% growth over 2024. The Phase 3 ENCORE trial, designed to support full U.S. approval and label expansion for all MAC lung disease patients, is on track for topline data in the first half of 2026. Positive results could expand the addressable U.S. patient population from approximately 15,000 to over 100,000, and worldwide to over 25 million, potentially making ARIKAYCE a blockbuster product.

Robust Pipeline Catalysts

Insmed's clinical pipeline is poised for multiple readouts and Phase 3 initiations:

• Brensocatib (CRSsNP): Topline data from the Phase 2b BiRCh trial is expected by early January 2026. A placebo-adjusted 0.7 treatment benefit on the sinus total symptom score is considered a "clear win," with the trial 80% powered for a 0.97 effect. This could unlock a significant commercial opportunity, potentially larger than bronchiectasis, given the nearly 30 million diagnosed patients in the U.S.
• Brensocatib (HS): The Phase 2b CEDAR trial is fully enrolled, with topline data anticipated in the first half of 2026. A 20% placebo-adjusted reduction in abscess and nodule count (AN count) is the "bar for success," and 40% would be a "home run."
• TPIP (Pulmonary Hypertension): The PALM-ILD Phase 3 study for PH-ILD is expected to initiate in Q4 2025. A Phase 3 study for PAH is planned for early 2026, following positive Phase 2b results showing a 35% placebo-adjusted reduction in pulmonary vascular resistance (PVR) and a 35.5-meter improvement in 6-minute walk distance. Additional Phase 3 studies for progressive pulmonary fibrosis (PPF) and idiopathic pulmonary fibrosis (IPF) are anticipated in H2 2026.
• Gene Therapy: The Phase 1 ASCEND trial for INS1201 (DMD) has completed dosing its first cohort with no concerning safety signals. The IND for INS1202 (ALS) was cleared in Q3 2025, with a Phase 1 trial in preparation. First human data from these programs are hoped for in the next 18 months.
• Next-Generation DPP1 Inhibitors: The first candidates are expected to enter the clinic in 2026, targeting rheumatoid arthritis and inflammatory bowel disease.

Risks and Challenges

Despite the promising outlook, Insmed faces several risks inherent in the biopharmaceutical industry. The commercial launch of BRINSUPRI, while off to a positive start, is still in its early stages, and its long-term trajectory will depend on sustained physician adoption and favorable market access. Management has cautioned that initial sales benefited from inventory stocking and that the first full quarter of launch will provide clearer insights. Establishing "frictionless" prior authorization and reauthorization requirements with payers remains an ongoing effort, and a slowdown in access could occur once criteria are firmly established and enforced.

The Inflation Reduction Act (IRA) poses a financial risk, as BRINSUPRI will be immediately subject to covering 20% of catastrophic coverage for Medicare patients, impacting gross-to-net revenues. While ARIKAYCE benefits from a temporary small manufacturer exemption, its gross-to-net is also expected to increase due to retroactive price inflation adjustments.

Clinical development carries inherent uncertainties. While Insmed has set clear bars for success for its pipeline programs, positive Phase 2 results do not guarantee Phase 3 success or regulatory approval. The gene therapy programs, in particular, are subject to significant safety concerns, as highlighted by recent industry events, necessitating a cautious and deliberate development approach. Furthermore, the company's reliance on third-party manufacturers and suppliers for its products introduces supply chain risks.

Conclusion

Insmed Incorporated stands at a pivotal juncture, transforming into a multi-product biopharmaceutical company with a compelling growth narrative. The successful U.S. launch of BRINSUPRI, coupled with the sustained, record-setting performance of ARIKAYCE, underscores the company's commercial execution and the significant unmet needs its therapies address. A robust and diverse pipeline, driven by innovative technological platforms in DPP1 inhibition, inhaled delivery, and intrathecal gene therapy, promises a steady stream of clinical catalysts and substantial long-term value creation.

While challenges related to market access, evolving regulatory landscapes, and the inherent risks of drug development persist, Insmed's strong financial position, strategic investments in R&D and commercial infrastructure, and a patient-centric culture position it favorably. The company's ability to leverage its technological differentiators to deliver first- and best-in-class therapies in niche rare disease markets, while strategically expanding into broader indications, forms the core of its investment thesis. As Insmed continues to execute on its ambitious roadmap, its potential to significantly impact patient lives and generate substantial shareholder value appears increasingly compelling.