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RICHMOND, Va., March 11, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Insmed Inc. (Nasdaq: INSM), a developer of follow-on biologics (FOB) and biopharmaceuticals, today reported results for the quarter and full-year ended December 31, 2008.
Company Highlights
"The sale of our FOB assets to Merck represents a watershed moment for Insmed," said Dr. Geoffrey Allan, Ph.D., President and CEO Insmed. "This agreement demonstrates Insmed's world-class clinical capabilities, and provides us with a substantial cash infusion that positions us well for future growth. In the short-term, we expect to be cash neutral for the balance of 2009 as we continue moving ahead with our IPLEX(TM) programs for MMD and ALS. In addition, we intend to pursue a comprehensive and thoughtful analysis to determine the most appropriate use of the proceeds we will receive from Merck. Our objective, though, is to utilize this capital to grow our business, and create additional shareholder value, as we have done through the transaction with Merck."
Financial Results for Fourth Quarter and Full-year 2008
Revenues for the fourth quarter ended December 31, 2008 were $2.9 million, up from $2.1 for the corresponding period in 2007. The increase was mainly attributable to an $846,000 increase in cost recovery revenue from our EAP to treat patients with ALS in Italy.
The net loss for the fourth quarter of 2008 was $4.0 million or $0.03 per share, compared with a net loss of $3.3 million or $0.03 per share in the fourth quarter of 2007.
R&D expenses increased to $5.4 million from $4.6 million, reflecting an increase in clinical trial activity for our FOB and IPLEX(TM) programs. SG&A Expenses increased to $1.3 million from $0.9 million, due primarily to higher IPLEX(TM) distribution costs and increased legal costs associated with the Merck transaction.
Interest income in the fourth quarter of 2008 fell to $47,000 from $264,000 in same period of 2007. This was due to the combination of a lower average cash balance on hand and lower interest rates during the most recent quarter. Interest expense increased slightly to $273,000 in the most recent period from $217,000 during the corresponding period of 2007.
Revenues for the full-year 2008 totaled $11.7 million, up from $7.6 million in the corresponding period of 2007. This increase was primarily due to a $5.1 million improvement in cost recovery from the EAP to treat patients with ALS in Italy and the grant receipt of $1.0 million from the Muscular Dystrophy Association supporting the IPLEX(TM) MMD trial. This was partially offset by the absence of license income from Napo and the revenues lost from our withdrawal of IPLEX(TM) in the short stature market pursuant to the terms of our settlement agreement with Genentech Inc. and Tercica Inc., entered into in March 2007.
The net loss for the 12 months ended December 31, 2008 was $15.7 million or $0.13 per share, compared to $20.0 million or $0.17 per share for the 12 months ended December 31, 2007. R&D Expenses increased to $21.0 million from $19.2 million, reflecting the higher activity as our clinical trials in the FOB and IPLEX(TM) areas advanced. SG&A Expenses fell to $5.1 million from $8.2 million, due to the elimination of litigation expenses following the March 2007 settlement and the removal of commercial expenses associated with our business restructuring plan.
Interest income for the full-year 2008 was $0.5 million, compared to $1.2 million for the full-year 2007. This decrease was mainly due to lower interest rates and a lower average cash balance for the full-year 2008 as compared to the full-year 2007. Interest expense for the 12 months ended December 31, 2008 was $1.3 million, compared to $682,000 for the corresponding period of 2007. This higher interest expense was due to an increase in the debt discount amortization resulting from the quarterly payments of our 2005 convertible notes, which began in March 2008. The $500,000 loss on investments represents the full write down on the prior year Napo investment during 2008.
As of December 31, 2008, we had total cash, cash equivalents and short-term investments on hand of $2.4 million, compared to $16.5 million on hand as of December 31, 2007. The $14.1 million decrease in cash, cash equivalents and short-term investments mainly reflected the use of $12.0 million for operating activities and $2.2 million for principal and interest repayment of our 2005 convertible notes, which began on March 1, 2008.
Conference Call
To participate in today's live 8:30 AM ET conference call, please dial 866-700-5192 (U.S. callers) or 617-213-8833 (international), and provide passcode 10018019. A live webcast of the call will also be available at http://phx.corporate-ir.net/playerlink.zhtml?c=122332&s=wm&e=2106073. Please allow extra time prior to the webcast to register, download and install any necessary audio software.
The webcast will be archived for 30 days, and a telephone replay of the call will be available for seven days, beginning at 12:30 PM ET on March 11th at 888-286-8010 (U.S. callers) or 617-801-6888 (international), using passcode 38324430.
About Insmed
Insmed Inc. is a biopharmaceutical company with unique protein process development and manufacturing experience and a proprietary protein platform aimed at niche markets with unmet medical needs. For more information, please visit www.insmed.com.
Forward-Looking Statements
This release contains forward-looking statements which are made pursuant to provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that such statements in this release, including statements relating to planned clinical study design, regulatory and business strategies, plans and objectives of management and growth opportunities for existing or proposed products, constitute forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statements. The risks and uncertainties include, without limitation, risks that closing conditions under our agreement with Merck & Co., Inc. may not be met, product candidates may fail in the clinic or may not be successfully marketed or manufactured, we may lack financial resources to complete development of product candidates, the FDA may interpret the results of studies differently than us, competing products may be more successful, demand for new pharmaceutical products may decrease, the biopharmaceutical industry may experience negative market trends, our continuing efforts to grow the business and develop IPLEX(TM) may be unsuccessful, the actual market for MMD may not actually match up with our external assessment, our common stock could be delisted from the Nasdaq Capital Market and other risks and challenges detailed in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2007. Readers are cautioned not to place undue reliance on any forward-looking statements which speak only as of the date of this release. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances that occur after the date of this release or to reflect the occurrence of unanticipated events.
INSMED INCORPORATED
Consolidated Balance Sheets
(in thousands, except share and per share data)
December 31, December 31,
2008 2007
Assets
Current assets:
Cash, cash equivalents and
short-term investments $2,397 $16,479
Accounts receivable, net 122 250
Prepaid expenses 74 244
Total current assets 2,593 16,973
Long-term assets:
Restricted cash - long term 2,095 2,095
Investments - 258
Deferred financing costs, net 70 170
Property and equipment, net - 4
Total long-term assets 2,165 2,527
Total assets $4,758 $19,500
Liabilities and stockholders'
equity (deficit)
Current liabilities:
Accounts payable $1,277 $904
Accrued project costs & other 936 503
Payroll liabilities 453 631
Restricted stock unit liability 113 -
Interest payable 13 23
Deferred rent 168 115
Deferred income 302 245
Convertible debt 2,211 2,211
Debt discount (596) (950)
Net convertible debt 1,615 1,261
Total current liabilities 4,877 3,682
Long-term liabilities:
Convertible debt 553 2,764
Debt discount (66) (651)
Net long-term convertible debt 487 2,113
Asset retirement obligation 2,217 2,217
Total liabilities 7,581 8,012
Stockholders' equity (deficit):
Common stock; $.01 par value;
authorized shares 500,000,000;
issued and outstanding shares,
122,494,010 in 2008 and
121,904,312 in 2007 1,225 1,219
Additional paid-in capital 342,378 341,270
Accumulated deficit (346,426) (330,759)
Accumulated other comprehensive
loss:
Unrealized loss on investment - (242)
Net stockholders' equity (deficit) (2,823) 11,488
Total liabilities and
stockholders' equity (deficit) $4,758 $19,500
INSMED INCORPORATED
Consolidated Statements of Operations
(in thousands, except per share data - unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Sales, net $- $- $- $423
Royalties 61 41 144 121
License income - 62 - 1,607
Grant revenue - - 1,044 -
Other expanded access
Program income, net 2,878 2,032 10,511 5,430
Total revenues 2,939 2,135 11,699 7,581
Operating expenses:
Cost of goods sold - - - 576
Research and development 5,353 4,614 21,047 19,198
Selling, general and
administrative 1,324 865 5,063 8,246
Total expenses 6,677 5,479 26,110 28,020
Operating loss (3,738) (3,344) (14,411) (20,439)
Interest income 47 264 500 1,159
Interest expense (273) (217) (1,256) (682)
Loss on investments - - (500) -
Net loss $(3,964) $(3,297) $(15,667) $(19,962)
Basic and diluted net
loss per share $(0.03) $(0.03) $(0.13) $(0.17)
Shares used in computing
Basic and diluted net
loss per share 122,318 121,812 122,132 114,682
INSMED INCORPORATED
Consolidated Statements of Cash Flows
(in thousands - unaudited)
Twelve Months Ended
December 31,
2008 2007
Operating activities
Net loss $(15,667) $(19,962)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 1,043 406
Stock based compensation expense 850 521
Stock options issued for services 147 38
Realized loss on investments 500 -
Changes in operating assets and
liabilities:
Accounts receivable 128 (9)
Inventory - 576
Other assets 170 (157)
Accounts payable 373 (6,282)
Accrued project costs & other 433 (612)
Payroll liabilities (178) (671)
Deferred rent 53 61
Deferred income 57 245
Restricted stock unit liability 113 -
Asset retirement obligation - 591
Interest payable (10) -
Net cash used in operating activities (11,988) (25,255)
Investing activities
Decrease in short-term investments 12,673 9,066
Purchases of investments - (500)
Net cash provided by investing activities 12,673 8,566
Financing activities
Proceeds from issuance of common stock
Public Offering - 18,230
Issuance costs - (1,266)
Warrants converted into shares - -
Other 117 138
Total proceeds from issuance of common
stock 117 17,102
Repayment of convertible notes (2,211) -
Other - 1,020
Net cash (used in) provided by financing
activities (2,094) 18,122
(Decrease) Increase in cash and cash
equivalents (1,409) 1,433
Cash and cash equivalents at beginning of
period 3,554 2,121
Cash and cash equivalents at end of period $2,145 $3,554
SOURCE Insmed Inc.
http://www.insmed.com
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