Insmed Incorporated Reports Financial Results for the First Quarter Ended March 31, 2006.RICHMOND, Va. -- Insmed Incorporated (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :INSM INSM Initiative Neue Soziale Marktwirtschaft (German) INSM Integrated Network and Systems Management ), a biopharmaceutical company focused on the development and commercialization of drugs for the treatment of metabolic and endocrine diseases Among the hundreds of endocrine diseases (or endocrinological diseases) are:
adj. Not satisfied or fulfilled: unmet demands. medical needs, today announced results for the three month period ended March 31, 2006.
$000's (except EPS) Q1 2006 Q1 2005
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Revenues 54 57
Net loss (13,427) (5,764)
Net cash used in operations 11,678 6,295
Earnings per share (0.17) (0.13)
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Discussion of Revenue and Expense Items Revenues for the three months ended March 31, 2006 were $54,000 as compared to $57,000 for the corresponding period of 2005. The net loss for the first quarter ended March 31, 2006 was $13.4 million or $0.17 per share, as compared to a net loss of $5.8 million or $0.13 per share for the corresponding quarter of 2005. The $7.7 million increase in the net loss for the first quarter of 2006, as compared to the corresponding quarter of 2005, was due to increases of $2.9 million in research and development (R&D), $2.5 in selling, general and administration (SG&A) and $2.5 million in interest expense. These increases in expense were partially offset by a $0.2 million rise in interest income. The increases in R&D and SG&A expenses resulted primarily from higher production and marketing expenses in support of our planned Q2 2006 IPLEX(TM) product launch, which remains on track, plus additional expenses related to the ongoing patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. and unfair business practices litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . The increase in interest expense, all of which is non-cash, is due entirely to the acceleration of the debt discount on the March 2005 convertible notes, a number of which were converted during the first quarter of 2006. The increased investment income results mainly from the higher cash balance available for investment in the first quarter of 2006 as compared to the corresponding period of 2005. As of March 31, 2006, the company had total cash and cash equivalents of $59.2 million which represents an increase of $40.4 million from December 31, 2005. This increase is mainly due to the $52.1 million in net cash provided by financing activities during the quarter, which includes the recent sale of equity and the cash from recent warrant exercises, and was partially offset by the use of $11.7 million in support of our business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . Conference Call Insmed will host a conference call on Monday, May 8, at 4:30 p.m. Eastern Time to discuss the financial results for the first quarter of 2006 and provide a business update. Interested investors can listen to the call over the internet from Insmed's investor relations Investor relations The process by which the corporation communicates with its investors. website at www.insmed.com or by dialing (800) 475 -3716 (domestic) or (719) 457-2728 (international), passcode: 9480743 A telephonic replay of the call will be available for one week at (888) 203 -1112 (domestic) or (719) 457-0820 (international), passcode: 9480743. A web replay of the call will be available through our corporate website, in the investor relations segment, beginning at 6:00 p.m. Eastern Time. About Insmed Incorporated Insmed is a biopharmaceutical company focused on the development and commercialization of drug candidates for the treatment of metabolic diseases metabolic disease, n a disorder that causes dysfunction of the metabolic action of the body, resulting in loss of control of homeostasis. paraneoplastic syndrome and endocrine endocrine /en·do·crine/ (en´do-krin, en´do-krin) 1. secreting internally. 2. pertaining to internal secretions; hormonal. See also under system. en·do·crine adj. disorders with unmet medical needs. For more information, please visit www.insmed.com. The company's leading product, IPLEX was approved as an orphan drug orphan drug, drug developed under the U.S. Orphan Drug Act (1983) to treat a disease that affects fewer than 200,000 people in the United States. The orphan drug law offers tax breaks and a seven-year monopoly on drug sales to induce companies to undertake the by the United States Food and Drug Administration United States Food and Drug Administration (FDA), n.pr a unit of the Public Health Service created to protect the health of the nation against impure and unsafe foods, drugs, and cosmetics. in December 2005 for the treatment of growth failure in children with severe primary IGF-I IGF-I see somatomedin C. IGF-I Insulin-like growth factor I, somatomedin-C A polypeptide hormone structurally similar to proinsulin, synthesized in the liver and fibroblasts, giving fibroblasts a paracrine function; serum levels correlate with deficiency (Primary IGFD) or with growth hormone growth hormone or somatotropin (sōmăt'ətrō`pən), glycoprotein hormone released by the anterior pituitary gland that is necessary for normal skeletal growth in humans (see protein). (GH) gene deletion deletion /de·le·tion/ (de-le´shun) in genetics, loss of genetic material from a chromosome. de·le·tion n. Loss, as from mutation, of one or more nucleotides from a chromosome. who have developed neutralizing antibodies neu·tral·iz·ing antibody n. An antibody that reacts with an infectious agent, usually a virus, and destroys or inhibits its infectiveness and virulence. to GH. About IPLEX IPLEX, a complex of recombinant recombinant /re·com·bi·nant/ (re-kom´bi-nant) 1. the new entity (e.g., gene, protein, cell, individual) that results from genetic recombination. 2. pertaining or relating to such an entity. See also under DNA. human IGF-I and its binding protein IGFBP-3 (rhIGF-I/rhIGFBP-3), is the only once-daily IGF-I replacement therapy. It is also the only FDA-approved therapy that provides both IGF-I and IGFBP-3 to treat children with severe primary IGFD. The drug, to be launched during the second quarter of 2006, is also being investigated for the treatment of various other diseases with unmet medical needs, including extreme insulin resistance Insulin Resistance Definition Insulin resistance is not a disease as such but rather a state or condition in which a person's body tissues have a lowered level of response to insulin, a hormone secreted by the pancreas that helps to regulate the level , myotonic muscular dystrophy Noun 1. myotonic muscular dystrophy - a severe form of muscular dystrophy marked by generalized weakness and muscular wasting that affects the face and feet and hands and neck; difficult speech and difficulty with the hands that spreads to the arms and shoulders and and HIV HIV (Human Immunodeficiency Virus), either of two closely related retroviruses that invade T-helper lymphocytes and are responsible for AIDS. There are two types of HIV: HIV-1 and HIV-2. HIV-1 is responsible for the vast majority of AIDS in the United States. Associated Adipose adipose /ad·i·pose/ (ad´i-pos) 1. fatty. 2. the fat present in the cells of adipose tissue. ad·i·pose adj. Of, relating to, or composed of animal fat; fatty. Redistribution re·dis·tri·bu·tion n. 1. The act or process of redistributing. 2. An economic theory or policy that advocates reducing inequalities in the distribution of wealth. Syndrome (HARS HARS Historical Aircraft Restoration Society HARS HIV/AIDS Reporting System HARS Historic Area Remediation Site HARS Highway Advisory Radio System (public service announcements) HARS High Altitude Route System ). About the Condition Severe primary IGFD is a genetic or acquired condition in which patients do not generate sufficient quantities of insulin-like growth factor-I (IGF-I) due to defect in the growth hormone (GH) receptor/IGF-I pathway. Gene mutations Noun 1. gene mutation - (genetics) a mutation due to an intramolecular reorganization of a gene point mutation genetic science, genetics - the branch of biology that studies heredity and variation in organisms leading to growth failure due to IGF-I deficiency have been identified in the growth hormone receptor Growth hormone receptor is a protein which acts as a receptor for somatotropin. Defects in the gene are associated with Laron syndrome. External links
prog·no·sis n. pl. prog·no·ses 1. for adult stature. Statements included within this press release, which are not historical in nature, may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. for purposes of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provided by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements in this press release include, but are not limited to, statements regarding planned clinical trial design, our regulatory and business strategies, plans and objectives of management and growth opportunities for existing or proposed products. Such forward-looking statements are subject to numerous risks and uncertainties, including risks that 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 FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. may interpret the results of our studies differently than we have, competing products may be more successful, demand for new pharmaceutical products may decrease, the biopharmaceutical industry may experience negative market trends and other risks detailed from time to time in our filings with the Securities and Exchange Commission. As a result of these and other risks and uncertainties, actual results may differ materially from those described in this press release. For further information with respect to factors that could cause actual results to differ from expectations, reference is made to our reports filed by the Company with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. The forward-looking statements made in this release are made only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" and Insmed disclaims any intention or responsibility for updating predictions or financial guidance contained in this release.
INSMED INCORPORATED
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
March 31, Dec. 31,
2006 2005
---------- ---------
Assets
Current assets:
Cash and cash equivalents $59,207 $18,835
Restricted cash 285 285
Other current assets 33 83
---------- ---------
Total current assets 59,525 19,203
Long-term assets:
Restricted cash - long term 2,830 3,118
Deferred financing costs, net 270 532
Property and equipment, net 15 17
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Total long-term assets 3,115 3,667
Total assets $62,640 $22,870
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Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 2,243 $ 968
Accrued project costs & other 4 1,990
Payroll liabilities 926 1,574
Interest payable 28 52
Restructuring reserve 204 286
---------- ---------
Total current liabilities 3,405 4,870
Long-term liabilities:
Convertible debt 6,013 11,438
Debt discount (2,539) (5,001)
---------- ---------
Net convertible debt 3,474 6,437
Asset retirement obligation 1,182 1,034
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Total liabilities 8,061 12,341
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Stockholders' equity:
Common stock; $.01 par value; authorized
share 500,000,000; issued and outstanding
shares, 100,150,700 in 2006 and
66,525,792 in 2005 1,001 665
Additional paid-in capital 321,663 264,522
Accumulated deficit (268,085) (254,658)
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Net stockholders' equity 54,579 10,529
---------- ---------
Total liabilities and stockholders'
equity $62,640 $22,870
========== =========
INSMED INCORPORATED
Condensed Consolidated Statements of Operations
(in thousands, except per share data - unaudited)
Three Months Ended
March 31
---------------------
2006 2005
-------- -------
Revenues $ 54 $ 57
Operating expenses:
Research and development 7,174 4,287
Selling, general and administrative 3,800 1,293
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Total operating expenses 10,974 5,580
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Operating loss (10,920) (5,523)
Interest income 312 64
Interest expense (2,819) (305)
-------- -------
Net loss $(13,427) $(5,764)
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Basic and diluted net loss per share $ (0.17) $ (0.13)
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Shares used in computing basic and
diluted net loss per share 79,987 44,986
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INSMED INCORPORATED
Consolidated Statements of Cash Flows
(in thousands - unaudited)
Three Months Ended
March 31
2006 2005
-------- -------
Operating activities
Net loss $(13,427) $(5,764)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 2,726 226
Stock based compensation expense 270 -
Stock options issued for services 20 -
Changes in operating assets and liabilities:
Other assets 50 74
Accounts payable 1,275 (1,080)
Accrued project costs (1,986) (125)
Payroll liabilities (648) 224
Restructuring reserve (82) (78)
Asset retirement obligation 148 148
Interest payable (24) 80
-------- -------
Net cash used in operating activities (11,678) (6,295)
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Financing activities
Proceeds from issuance of convertible debt with
detachable stock warrants - 35,000
Proceeds from issuance of common stock
Public offering - issuance of 23 million
shares 43,240 -
Issuance costs (316) -
Warrants converted into shares 8,810 -
Other 28 87
-------- -------
Total proceeds from issuance of common stock 51,762 87
Costs incurred in conjunction with issuance
of debt - (2,428)
Cash restricted to restricted letters of credit 288 185
-------- -------
Net cash provided by financing activities 52,050 32,844
-------- -------
Increase in cash and cash equivalents 40,372 26,549
Cash and cash equivalents at beginning
of period 18,835 9,222
-------- -------
Cash and cash equivalents at end
of period $ 59,207 $35,771
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Supplemental information
Cash paid for interest $ 83 $ -
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