1st Qtr results:
RICHMOND, Va., May 13 /PRNewswire-FirstCall/ -- Insmed Inc. (Nasdaq: INSM - News), a biopharmaceutical company, today reported results for the first quarter ended March 31, 2009.
Recent Company Highlights
Follow-on Biologics Program
Finalized sale of follow-on biologics (FOB) assets to Merck & Co., Inc., through an affiliate, for gross proceeds of $130 million; and
Net of finance and legal fees paid, Insmed has received net proceeds to date of approximately $128 million as a result of this agreement. Taxes due on the sale will be paid by installment during the balance of the year, resulting in total expected net proceeds of approximately $125 million.
IPLEX(TM)
Continue to expect preliminary Phase 2 data in Myotonic Muscular Dystrophy (MMD) in the second quarter of 2009;
The FDA announced that it would allow Insmed to provide access to IPLEX(TM) for investigational use in patients with Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig's disease). Insmed will conduct a controlled clinical trial under an Investigational New Drug application;
Announced the signing of an agreement with IDIS, a private, UK-based company specializing in the management of medicines on a named patient basis, also known as expanded access programs (EAPs) or named patient programs (NPPs), to manage such programs for IPLEX(TM) worldwide, excluding the U.S. and Italy; and
Generated $2.0 million in cost recovery revenue from the IPLEX(TM) EAP for ALS in Italy during the first quarter of 2009.
Corporate
Regained compliance with NASDAQ's minimum $1.00 per share bid price requirement.
"The year has started off with a litany of positive, value-creating events," said Dr. Geoffrey Allan, Ph.D., President and CEO Insmed. "The transaction with Merck will add about $125 million to our balance sheet and has provided us with significant financial flexibility in terms of how we might go about continuing to grow our business and enhance shareholder value. At the same time, our IPLEX(TM) program continues to move forward on all fronts. We continue to expect preliminary Phase 2 results in MMD before the end of the second quarter. In addition, the ALS EAP is set to expand internationally via our agreement with IDIS, and we are discussing the parameters of a controlled clinical trial in this indication with the FDA in the U.S. As our regaining compliance with NASDAQ's minimum $1.00 per share bid price requirement would indicate, the market is beginning to appreciate our successes, and we look forward to sustaining the momentum we have generated in the first quarter throughout the remainder of the year."
Financial Results for First Quarter Ended March 31, 2009
Total revenues for the first quarter ended March 31, 2009 were $2.4 million, the same as the corresponding period in 2008.
Net income for the first quarter of 2009 increased to $117.8 million, or $0.96 per share, compared with a net loss of $4.9 million, or $0.04 per share, in the first quarter of 2008. This $122.7 million improvement was primarily due to the gain on sale of our FOB assets to Merck which was partially offset by increases in SG&A and R&D expenses due to the recognition of stock compensation expense.
The $2.2 million increase in total expenses was due to a $0.5 million increase in research and development ("R&D expenses") and a $2.1 million increase in selling, general and administrative expenses ("SG&A Expenses"), which was partially offset by the absence of a $0.4 million loss on investments, which was recorded in the first quarter of 2008.
The higher R&D and SG&A Expenses were due largely to the recognition of stock compensation expense for the restricted stock and restricted stock units that vested on March 31, 2009 and the award of bonuses. Interest income for the most recent first quarter of $23,000 was $256,000 lower than the corresponding quarter of 2008 due to a combination of the lower interest rate environment and a lower average cash balance. Interest expense of $242,000 was $112,000 lower than the same quarter in 2008 due to a decrease in the debt discount amortization resulting from the lower average balance of the 2005 convertible notes, which began repayment in March 2008.
As of March 31, 2009, the Company had total cash, cash equivalents and short-term investments on hand of $127.5 million, compared to $2.4 million on hand as of December 31, 2008. The $125.1 million increase in cash, cash equivalents and short-term investments was due to the $127.8 million in net proceeds from the sale of Insmed's FOB assets to Merck, which was minimally offset by $2.1 million utilized to fund operations and $0.6 million for the partial repayment of the Company's 2005 convertible notes.
Conference Call
To participate in today's live 8:30 AM ET conference call, please dial 800-706-7748 (U.S. callers) or 617-614-3473 (international), and provide passcode 81641944. A live webcast of the call will also be available at: