Published: November 03, 2010
Insmed Announces Financial Results for Third Quarter and Nine-Months Ended September 30, 2010
RICHMOND, Va., Nov. 3, 2010 /PRNewswire-FirstCall/ -- Insmed Inc. (Nasdaq: INSM), a biopharmaceutical company, today reported results for the third quarter and nine-months ended September 30, 2010.
Total revenues for the third quarter ended September 30, 2010 were $1.8 million, as compared to $2.5 million for the corresponding period in 2009. The $0.7 million decline in revenue was entirely due to lower cost recovery in the most recent quarter from our IPLEX(TM) Expanded Access Program ("EAP") in Italy for the treatment of Amyotrophic Lateral Sclerosis ("ALS"). In 2009, the Company ceased patient enrollment in the EAP in order to preserve inventory for existing patients.
Net loss for the third quarter of 2010 was $0.3 million, break even on a per share basis, compared with a net loss of $0.1 million, also break even on a per share basis, reported in the third quarter of 2009. The $0.2 million change in net loss was primarily due to the $0.7 million decrease in revenues, noted above, and a $0.3 million decrease in investment income, which were largely offset by an overall reduction of $0.8 million in operating expenses.
The $0.8 million decrease in total expenses resulted from a $0.3 million reduction in research and development expenses ("R&D expenses") and a $0.5 million decline in selling, general and administrative expenses ("SG&A expenses"). The lower R&D expenses resulted largely from the elimination of IPLEX(TM) fill-finish costs which we incurred in the third quarter of 2009, while the reduced SG&A expenses were principally due to lower external market research and consultancy fees associated with our ongoing strategic review process.
Investment income for the 2010 third quarter was $345,000, as compared to $682,000 for the same period in 2009; as overall market returns declined in the current quarter versus the corresponding period in 2009.
Total revenues for the nine-months ended September 30, 2010 were $5.6 million, as compared to $7.9 million for the corresponding period in 2009. The $2.3 million decline in revenue was due to a combination of a $1.7 million decline in EAP cost recovery, the receipt, during the first nine months of 2009, of $0.5 million in grant revenue for our exploratory Phase 2 IPLEX(TM) trial in patients with myotonic muscular dystrophy and $0.1 million in lower income from an expired TGF-beta royalty.
Net loss for the first nine-months of 2010 was $0.6 million, break even on a per share basis, compared with net income of $116.0 million, or $0.92 per share, reported in the same period of 2009. The $116.6 million change in net loss was primarily due to the $125.0 million after tax gain on sale of our follow on biologics ("FOB") assets to Merck in March 2009, together with the $2.3 million reduction in revenues noted above, which were partially offset by an overall reduction of $9.5 million in operating expenses, a $0.5 million improvement in investment income and a $0.7 million reduction in interest expense.
The $9.5 million decrease in total expenses resulted from a $6.2 million reduction in R&D expenses and a $3.3 million decline in SG&A expenses. The lower R&D expenses reflected the elimination of manufacturing expenses following the sale of our FOB assets in March 2009, while the reduced SG&A expenses were principally due to lower personnel costs also associated with the asset sale to Merck.
Investment income for the first nine-months of 2010 was $1.3 million. This was an increase of $0.5 million over the corresponding period of 2009, and was due to improved investment returns during the period and a significantly higher cash balance invested for the full nine-months of 2010. The reduction in interest expense for the first nine-months of 2010 as compared the same period in 2009 was entirely due to the elimination of the 2005 convertible notes, which were fully repaid in March 2010.
As of September 30, 2010, the Company had total cash, cash equivalents and short-term investments on hand of $126.4 million, comprised of $114.6 million in short-term investments, $9.7 million in cash and cash equivalents and $2.1 million in a certificate of deposit. This compares to $124.3 million as of December 31, 2009. The $2.1 million increase in cash, cash equivalents and short-term investments was due primarily to the receipt of a $2.0 million income tax refund in 2010 and a $1.1 million improvement in unrealized gain on investments, which was partially offset by $0.8 million of net cash used in operating activities and the $0.2 million final payment on our 2005 convertible notes.
Conference Call
To participate in today's live 8:30 AM ET conference call, please dial 866-356-4281 (U.S. callers) or 617-597-5395 (international), and provide passcode 61751565. A live webcast of the call will also be available at http://phx.corporate-ir.net/playerlink.zhtml?c=122332&s=wm&e=3461146. 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 11:30 AM ET on November 3rd, at 888-286-8010 (U.S. callers) or 617-801-6888 (international), using passcode 28300679.
About Insmed
Insmed Inc. is a biopharmaceutical company with unique protein development experience and a proprietary protein platform aimed at niche markets with unmet medical needs. For more information, please visit http://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 business strategies, plans and objectives of management and our strategic review process, 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, we may be unsuccessful in identifying or reaching agreement with acquisition or merger candidates, our expenses may be higher than anticipated 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, 2009. 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.
Investor Relations Contact:
Brian Ritchie - FD
212-850-5683
brian.ritchie@fd.com
Media Contact:
Irma Gomez-Dib - FD
212-850-5761
irma.gomez-dib@fd.com
INSMED INCORPORATED
Consolidated Balance Sheets
(in thousands, except share and per share data)
September December
30, 31,
2010 2009
---- ----
Assets
Current assets:
Cash and cash
equivalents $9,687 $12,740
Short-term
investments 114,605 109,441
Income tax
receivable 59 2,023
Accounts
receivable, net 178 245
Prepaid expenses 364 159
--- ---
Total current
assets 124,893 124,608
Long-term assets:
Certificate of
deposit 2,085 2,085
Deferred financing
costs, net - 2
Total long-term
assets 2,085 2,087
----- -----
Total assets $126,978 $126,695
======== ========
Liabilities and
stockholders'
equity
Current
liabilities:
Accounts payable $431 $312
Accrued project
costs & other 1,150 1,150
Payroll
liabilities 481 580
Interest payable - 1
Deferred rent 132 132
Deferred revenue 98 398
Convertible debt - 231
Debt discount - (23)
Net convertible
debt - 208
--- ---
Total liabilities 2,292 2,781
----- -----
Stockholders'
equity:
Common stock; $.01
par value;
authorized shares
500,000,000;
issued and
outstanding
shares,
130,345,819 in
2010 and
130,208,099 in
2009
1,303 1,302
Additional paid-
in capital 350,458 350,243
Accumulated
deficit (228,666) (228,076)
Accumulated other
comprehensive
income:
Unrealized gain on
investment 1,591 445
Net stockholders'
equity 124,686 123,914
------- -------
Total liabilities
and stockholders'
equity $126,978 $126,695
======== ========
INSMED INCORPORATED
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Nine Months
Ended Ended
September September
30, 30,
---------- ----------
2010 2009 2010 2009
---- ---- ---- ----
Royalties $1 $21 $3 $79
Grant revenue - - - 544
Other expanded
access program
income, net 1,806 2,454 5,597 7,262
----- ----- ----- -----
Total revenues 1,807 2,475 5,600 7,885
Operating
expenses:
Research and
development 769 1,143 2,304 8,483
Selling, general
and
administrative 1,636 2,096 5,058 8,419
----- ----- ----- -----
Total expenses 2,405 3,239 7,362 16,902
----- ----- ----- ------
Operating loss (598) (764) (1,762) (9,017)
Investment
income 345 682 1,280 817
Interest expense - (68) (28) (730)
Gain on sale of
asset, net - - - 127,768
--- --- --- -------
Income (loss)
before taxes (253) (150) (510) 118,838
Income tax
expense 77 - 80 2,794
--- --- --- -----
Net (loss)
income $(330) $(150) $(590) $116,044
===== ===== ===== ========
Basic net (loss)
income per
share $(0.00) $(0.00) $(0.00) $0.92
====== ====== ====== =====
Shares used in
computing basic
net (loss)
income per
share 130,301 129,442 130,253 126,072
======= ======= ======= =======
Diluted net
(loss) income
per share $(0.00) $(0.00) $(0.00) $0.92
====== ====== ====== =====
Shares used in
computing
diluted net
(loss) income
per share 130,301 129,442 130,253 126,256
======= ======= ======= =======
INSMED INCORPORATED
Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
September 30,
2010 2009
---- ----
Operating activities
Net income $(590) $116,044
Adjustments to
reconcile net income
to net cash
(used in) provided by
operating
activities:
Depreciation and
amortization 25 661
Stock based
compensation expense 215 2,425
Gain on sale of
asset, net - (127,768)
Change in trading
securities - (498)
Realized loss on
investments - -
Changes in operating
assets and
liabilities:
Accounts receivable 67 (197)
Income tax receivable 1,964 -
Prepaid expenses (205) (162)
Accounts payable 119 (696)
Accrued project costs
& other - 288
Payroll liabilities (99) (32)
Income tax liability - 625
Deferred rent - (65)
Deferred revenue (300) (71)
Restricted stock unit
liability - (113)
Asset retirement
obligation - (2,217)
Interest payable (1) (11)
--- ---
Net cash provided by
(used in) operating
activities 1,195 (11,787)
----- -------
Investing activities
Cash received from
asset sale - 127,768
Sales of short-term
investments 90,739 -
Purchases of short-
term investments (94,757) (94,646)
Net cash provided by
(used in) investing
activities (4,018) 33,122
------ ------
Financing activities
Proceeds from
issuance of common
stock - 580
Repayment of
convertible notes (231) (1,016)
Certificate of
deposits - 10
Warrants converted
into shares - 3,493
Other 1 39
Net cash provided by
(used in) financing
activities (230) 3,106
---- -----
Increase (decrease)
in cash and cash
equivalents (3,053) 24,441
Cash and cash
equivalents at
beginning of period 12,740 2,397
------ -----
Cash and cash
equivalents at end
of period $9,687 $26,838
====== =======
SOURCE Insmed Inc.
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