Insmed Inc (INSM)

[coinstarz]

Let’s talk about INSM risk side…

1) Not enough money to convert from research company to sales/distribution/research company.

INSM currently has $20+ M cash in hand. Based upon historical cash burning rate of $20 M +/- a year (four year average), INSM can stay in the business for about one year without borrowing more money. If iPlex sale is strong enough at the second half year of 2006, INSM can borrow money against iPlex income. INSM would need money to do phase III for other drugs in the pipeline. Since iPlex has been approved by FDA, it could be much easier to find a partner to co-develop IGFBP-3 drugs.

2) Lawsuits over patent could impede progress and cut into revenues.

The litigation will no materials impact on INSM until 2008.

http://www.investorshub.com/boards/read_msg.asp?message_id=9046425

3) Buy out at too low price versus potential.

This could be a problem if some one (say PFE) wants to pay $5-7 for INSM. It’s hard to say NO. 90% of retail shareholders would say YES. Bad for company and good for shareholders who bought below 2?

4) Dilution if partner cannot be found which would be costly to current holders if they have to raise money at current PPS levels.

It was stated in SEC filing. The fully diluted shares are 106 million by 2010. I hope CD will be converted at higher price of 5-7.

IMO, the risk side of INSM is limited. In another word, the lowest PPS could be 1.50. Using today’s closing pps of 1.93, the dark side from here is 22% loss. The light side (reward side) potential is 3.50-5 in short term and 10-15 in long term. So upside potential is 81% - 160% gain in short term and 400+% in long term.