Insmed Incorporated Reports Financial Results for First Quarter Ended March 31, 2007
9:00 AM EDT May 10, 2007
Insmed Inc. (Nasdaq:INSM), a biopharmaceutical company focused on the development of drug candidates for the treatment of metabolic diseases and endocrine disorders with unmet medical needs, today announced results for the three month period ended March 31, 2007.
Total revenues for the three months ended March 31, 2007 were $1.7 million, which consisted of $0.7 million in cost recovery from our Expanded Access Program, $0.5 million in initial license income from our agreement with NAPO Pharmaceuticals, Inc., $0.4 million from commercial sales of IPLEX(TM), and $35,000 in royalties. Revenues for the corresponding period in 2006 were $54,000, all of which were royalties. The net loss for the first quarter of 2007 was $10.3 million or $0.10 per share, compared to a net loss of $13.4 million or $0.17 per share for the first quarter of 2006.
Total expenses for the first quarter of 2007 were $12.1 million, compared to $11.0 million for the corresponding quarter of 2006. The increase in expenses in the first quarter of 2007 as compared to the corresponding period in 2006 was due primarily to severance costs associated with our business restructuring, which were partially offset by reduced litigation expenses. The litigation expenses were recorded in research and development during the first quarter of 2006 and are currently recorded in selling, general and administrative expenses as we had moved from research and development to commercial operations through the first quarter of 2007.
Interest expense for the first quarter of 2007 was $0.2 million as compared to $2.8 million in the first quarter of 2006. The decrease in interest expense resulted from lower amortization of the debt discount associated with the March 2005 financing, as an acceleration of the discount took place in the first quarter of 2006 due to a conversion of notes into shares of our common stock.
As of March 31, 2007, we had total cash and cash equivalents of $12.0 million as compared to $24.1 million as of December 31, 2006.
On March 5, 2007, we reached a settlement agreement with Tercica Inc. and Genentech Inc. Pursuant to this settlement agreement, we ceased sales and marketing of IPLEX(TM) in the United States and agreed to withdraw our European Marketing Authorization Application for IPLEX(TM). Further, as a result of this settlement agreement, we restructured our business to eliminate our commercial department and downsize our manufacturing facility.
On May 4, 2007, we sold 20,255,367 shares of our common stock and warrants to purchase up to 2,025,536 shares of our common stock. The price to the investors was $0.90 per unit, which was comprised of one share of our common stock and a warrant to purchase 0.1 shares of our common stock. The units were not issued or certificated and the shares of common stock and warrants were immediately separable and issued separately. The warrants may be exercised between November 3, 2007 and May 3, 2012 and have an exercise price of $1.10 per share. The offering was made pursuant to our effective shelf registration statement on Form S-3 (Registration No. 333-131535) previously filed with the Securities and Exchange Commission. Net proceeds from the offering are expected to be approximately $16.9 million.
Conference Call
We will host a conference call on Thursday, May 10, 2007 at 11:00 a.m. Eastern Time to discuss the financial results for the first quarter of 2007, and provide a business update.
Individuals interested in listening to the live conference call may do so by dialing 866-558-6338 toll free within the United States and Canada, or 213-785-2437 for international callers.
A telephonic replay of the call will be available approximately two hours after the call for two weeks at 866-245-6755 from the United States or 416-915-1035 for international callers. The passcode is 270068.
Individuals interested in listening to the conference call via the Internet may do so by visiting our website at www.insmed.com. A replay of the call will be available on our website for 90 days.
