Wedbsuh Reiterates Outperform/Lowers PT on Insmed

Wedbsuh is out with a research report this afternoon, where it reiterates its Outperform rating on Insmed (NASDAQL INSM); it has a $9.00 price target on the stock, down from $15.00. The Wedbsuh analysts noted that Insmed has received a response from the FDA regarding the clinical hold on its program in Cystic Fibrosis. In a letter to INSM, the FDA noted that it has insufficient information to assess the risks of ARIKACE in CF patients and has requested that INSM conduct a 9-month inhalation toxicity study in dogs. Additionally, the company has also been asked to propose a CF patient population or disease state where the risk-benefit profile is more favorable. This has forced analysts to push their drug launch estimates out into the future. As for valuation, the analysts remarked, “We arrive at our $9 price target by taking the sum of the per share values of 6x US sales and 15x EU royalties in 2017 for both the CF and NTM opportunities discounting back at 30% over 5 years.”