Insmed Inc (INSM)

[ED20332]

TRCA: Upgrading to HOLD based on discussions with pediatric endocrinologists

* We spoke to pediatric endocrinologists about their perceptions and
anticipated prescribing patterns of Increlex and Insmed's iPlex over the
next 6-12 months. In total, these physicians treat roughly 2,000 children
with short stature annually
* Take-aways from these interviews suggest that Increlex's 4-5 month head
start over the launch of Insmed's iPlex may be its greatest advantage
* We have included Increlex's first-mover advantage into our model and have
increased our Increlex revenue estimates slightly for 2006-2008
* Physicians appear ready to prescribe Increlex this week and are unlikely
to switch patients to iPlex unless compliance or side effects become an
issue
* For any newly diagnosed child in mid-2006, when we expect both products to
be on the market, however, Increlex use will suffer, in our view, as
physicians are likely to experiment with both agents and will let
patients' families decide
* IPlex's frozen storage requirement was a minor concern to ped/endos with
whom we spoke, as was the volume of iPlex's injection, and may place iPlex
at a slight disadvantage to Increlex for some families, but iPlex's
once-daily dosing regimen, however, remains the most attractive option