Insmed Inc (INSM)

[jellybean]

You have overestimated the costs:

The addition of the Boulder manufacturing facility is expected to increase Insmed's operational expenses approximately $4.5 million for the remainder of the 2004 year. These expenses relate to personnel and raw material costs for fermentation, purification and commercial production of drug product. Insmed has also provided a Letter of Credit to the landlord of the Boulder facility in the amount of $1.6 million for prepayment of the outstanding lease term of 4 years and a Letter of Credit for $2.0 million to Baxter to cover facility restoration expenses on termination of the lease. Insmed will provide additional details regarding the addition of the Boulder facility during the regularly scheduled quarterly conference call on May 6.

How much would ramping up production at Avecia have cost? A lot. And the company was not going to get FDA approval without a valid mfting system which could not be started in 2005. In 2004, they had to make an investment in a mfting system, and the Boulder plant was by far the best decision.