Insmed's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Insmed, Inc. (INSM)

Q2 2012 Earnings Call

August 07, 2012 8:30 am ET

Executives

Brian Ritchie – Investor Relations, FTI Consulting

Timothy G. Whitten – President, Chief Executive Officer and Director

Analysts

Christopher N. Marai – Wedbush Securities, Inc.

Presentation

Operator

Good day ladies and gentlemen, and welcome to the Second Quarter 2012 Insmed Incorporated Earnings Conference Call. My name is Jeanine and I’ll be operator for today. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) As a reminder this conference is being recorded for replay purposes.

I would now like to turn the conference over to Mr. Brian Ritchie, FTI Consulting. Please proceed, sir.

Brian Ritchie

Thank you, operator. Good morning everyone. This is Brian Ritchie from FTI Consulting, and welcome to Insmed’s second quarter 2012 conference call. Insmed issued a press release this morning containing second quarter 2012 financial results, which is posted on the company’s website. Today, we are joined by Mr. Tim Whitten, President and CEO, who will provide a business update and review the financials. Following the prepared remarks, Tim will be available for a question-and-answer session. We would ask you to please limit yourself to one question and one follow-up, so we have time for as many questions as possible.

Before we proceed with the call, I would like to remind everyone that the Safe Harbor language contained in today’s press release also pertains to this conference call and webcast.

Please go ahead, Tim.

Timothy G. Whitten

Thank you, Brian. Hello everyone and thank you for joining us on today’s second quarter 2012 conference call.

The second quarter was a landmark in our history, as we transformed Insmed into a Phase 3 development stage company, and achieved several significant milestones. First, we made substantial progress in advancing ARIKACE in the clinic in our two priority orphan diseases, and we remain on track for achieving top-line results for CLEAR-108 and TARGET-NTM in mid-2013 and the fourth quarter of 2013 respectively.

Second, we substantially strengthened our financial position through the $20 million loan agreement with Hercules Technology Growth Capital. And finally, we reinforced our already strong intellectual property position as a second composition of matter patent was issued in the U.S. for ARIKACE and liposomal aminoglycosides in general.

Following a careful and thoughtful evaluation of the ARIKACE clinical development options, we announced in May that the company’s resources would be applied towards the CLEAR-108 Phase 3 European and Canadian registration study in Cystic Fibrosis patients who had Pseudomonas Lung Infections and the TARGET-NTM Phase 2 trial of ARIKACE in patients with recalcitrant or resistant non-tuberculous mycobacteria lung disease.

CLEAR-108 compares ARIKACE to TOBI, the market-leading inhaled antibiotic from Novartis for three complete 28-day on-treatment and 28-day off-treatment cycles in about 300 patients. We dosed the first patient in April and remain on target to have top-line data in mid 2013. We are rapidly bringing sites online, in fact about 65 of the 80 planned sites have been activated and are recruiting patients.

As a reminder, patients who complete CLEAR-108 are eligible to enroll in CLEAR-110, which is an open-label study in which patients receive ARIKACE every other month for up to two years to assess primarily safety and tolerability.

Open-label simply means physicians and patients will know that the patients are receiving ARIKACE. As previously reported, we are deferring plans to initiate CLEAR-109, a Phase 3 study of ARIKACE in the U.S. for CF patients who have Pseudomonas Lung Infections until the company reviews top-line results from CLEAR-108. These results could provide additional clarity on the scope, design and conduct of the U.S. study. In addition, the deferral of CLEAR-109 allows us to allocate capital resources to our prioritized ARIKACE studies.

Moving on to non-TB mycobacteria, or NTM. Interest from potential participants in our TARGET-NTM Phase 2 clinical trials recalcitrant in or resistant patients has been strong, and we are well underway; we’re screening patients for this study.

As previously announced, we dosed our first patient in TARGET-NTM in June and plan to include about 100 patients in the trial. To-date, we have selected approximately 18 sites to participate in the study, and many of them are actively recruiting patients.

NTM lung infections often cause severe chronic debilitating and progressive lung disease, and can produce significant lung damage if not effectively treated. Unfortunately, current treatment options for these patients are sorely lacking. NTM lung infections are a growing health problem. Based on recent market research, we estimate there are about 50,000 patients in the U.S. with NTM lung infections, and about 40,000 of those have either non-TB mycobacteria avium complex or non-TB mycobacteria abscessus, which are the two pathogens included in the TARGET-NTM study.

The prevalence of these infections is growing rapidly, a study conducted by the National Institutes of Health on the prevalence of NTM lung disease was published just this past April in the American Journal of Respiratory Critical Care Medicine, this paper based on data from the Medicare database, showed NTM lung infections were growing at over 8% annually.

If ARIKACE is shown to be effective in treating these infections, they could prove to be a substantial advancement in the treatment of this chronic progressive debilitating disease. We remain on track to achieve top line results from the randomized portion of the study in the fourth quarter of 2013. In addition to the ARIKACE clinical program, we’re conducting a nine-month dog inhalation toxicity study of ARIKACE, which started in late April.

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