Insmed Down on Disappointing Arikayce Results - Analyst Blog

Insmed Incorporated INSM shares skid over 13% after the company announced that its candidate, Arikayce, failed to meet the primary objective in a phase II study (n=90). The candidate is being developed for the treatment of patients suffering from treatment resistant nontuberculous mycobacterial (NTM) lung infections.

The primary objective of the phase II study was a semi-quantitative measurement of the difference in mycobacterial density on a seven-point scale from baseline to the end of the randomized portion of the study. However, the candidate failed to meet the pre-specified level for statistical significance.

The phase II study evaluated Arikayce plus standard of care treatment against standard of care treatment plus placebo in treatment resistant NTM lung infected adults. These patients were on American Thoracic Society/Infectious Disease Society of America (ATS/IDSA) guideline therapy for a minimum period of six months before screening. These patients also continued to have positive mycobacterial cultures.

Insmed plans to discuss the results with the U.S. and EU regulatory authorities to decide the future path for Arikayce. Arikayce enjoys orphan drug designation for the NTM indication both in the U.S. and the EU. The company mentioned in its press release that currently there are no approved drugs in the U.S. for the treatment of this chronic, debilitating disease.

The results from the study are disappointing. Insmed is primarily focused on the development of Arikayce. Successful development of the candidate is important for the company's growth. Similar setbacks may pull down the stock further.

Insmed is also developing Arikayce for the treatment of pseudomonas aeruginosa (Pa) in patients suffering from cystic fibrosis CF. The candidate is currently in an ongoing two-year, open-label extension study for this indication. Arikayce also enjoys orphan drug designation for the CF indication both in the U.S. and EU. We expect investor focus to stay on Arikayce going forward.

Insmed, a biopharmaceutical company, currently carries a Zacks Rank #3 (Hold). Some better ranked stocks in the same sector include Alkermes ALKS, Gilead Sciences Inc. GILD and Alexion Pharmaceuticals, Inc. ALXN. All stocks carry a Zacks Rank #1 (Strong Buy).