Replies to post #3936 on Insmed Inc (INSM)

[John266]

YES SHE CAN LOWER

[trade4growth]

Aiming4:

The references in the article to "require the Company to license the patents" and "the judge will have to set a rate for future sales" are the same thing.

As to your other question, I can't imagine the judge setting the royalty rate so low that insmed would elect not to file an appeal. Based on Insmed's post verdict conference call the royalty would be required on future indications using the same manufacturing process and the royalty would remain in place to the extent any of the three patents have not expired (the 414 expires last in 2018). Exactly how low could that royalty possibly be to warrant not pursuing the alternative which is to appeal and possibly eliminate the royalties altogether? IMHO there is absolutely no chance that Insmed will NOT file an appeal.

The Inequitable conduct only directly affects the 151 patent, so the key is still to file an appeal in order to attempt to invalidate the 414 patent which reduces any royalty to a maximum 3-4 year period (287 & 151 patents both expire in 2010).

The keys as I see it right now in my order of priority are:

1. Judge Wilkins' ruling on the inequitable conduct motion related to the 151 patent(this may have some immediate bearing on verdict/mistrial, timing of the filing for an appeal, and royalty rate).

2. Judge Wilkens' decision regarding granting injunctive relief. Her opinion in some way may be influenced by outcome in #1 above.

3. Judge Wilkens' decision on a royalty rate for future sales (post verdict) assuming she does not grant injunctive relief.

4. Financing/Partner in EU announcements. I would like this as a higher priority on my list, but can not imagine a partnering announcement taking place prior to Judge's decision on injunctive relief.

5. Requirements that may be placed on insmed to set aside the cash for the $7.5 million up front payment and the royalty amount on PAST sales that would make this cash unavailable for operations and thus may result in the need for cash a little sooner. The set aside of the cash may be a court ordered requirement to place it in an escrow account or a requirement of Generally Accepted Accounting Principles (GAAP).

6. Filing of an appeal with the US Court of Appeals for the Federal Circuit with the objective of winning in all regards, but at minimum to get the 414 patent invalidated. This appeal is a given! Whether Insmed files it now or two months from now after the hearing on Feb 16th, 2007 is not a major issue to me.