Washington Editor
A public offering is netting $37.2 million for Insmed Inc., which plans to direct a good portion of the proceeds toward its FDA-approved growth hormone product iPLEX (mecasermin rinfabate).
The Glen Allen, Va.-based company on Friday priced 20 million common shares at $2 apiece, about a 10 percent markdown from Thursday’s $2.19 closing bid on the stock. On Friday, the shares (NASDAQ:INSM) fell 13 cents to $2.06.
The added capital certainly pads Insmed’s bank account; its reserves stood at $18.8 million as of Dec. 31, to which the company added $8.2 million from the exercise of warrants between Jan. 1 and Feb. 28.
At that latter date, Insmed had 76.8 million total shares outstanding, and about 86.5 million shares will be outstanding after the offering.
Insmed, which lost $12.9 million in its last fiscal quarter, plans to use its new funds for working capital and for other general corporate purposes, especially related to the continuing commercial launch and manufacturing of iPLEX, the pursuit of marketing authorization for iPLEX in Europe and additional clinical studies of the product.
The company’s near-term focus is on launching iPLEX, scheduled for next quarter, said Baxter Phillips, its director of investor relations. A once-daily replacement therapy for insulin-like growth factor-1, or IGF-1, it was approved in December to treat growth failure in children with severe primary IGF-1 deficiency or with growth hormone gene deletion who have developed neutralizing antibodies to growth hormone.
The company is building a specialty sales force to launch iPLEX in the U.S., with plans to target 400 pediatric endocrinologists believed to treat the majority of the nearly 6,000 children who suffer from short stature due to severe primary IGF-1 deficiency.
"We believe they’re the top prescribing docs in the country," Phillips told BioWorld Today.
In the third quarter, Insmed plans to file for European approval. Its efforts to expand iPLEX’s label include ongoing Phase II studies in patients with myotonic muscular dystrophy, HIV-associated adipose redistribution syndrome and extreme insulin resistance.
The company also plans to conduct additional clinical studies in other growth disorders associated with IGF-1 deficiency.
"Short stature is one of the many indications for iPLEX," Phillips said, noting that testing in the other indications "is moving forward very rapidly" as data are expected by the end of the year in those areas.
In addition to that product, Insmed’s longer-term development efforts primarily are focused on cancer by using a pair of compounds, a small molecule called INSM-18 and a naturally occurring antitumor agent labeled rhIGFBP-3, to target growth factors and their receptors.
INSM-18 is in a Phase I/II study in refractory prostate cancer patients, and rhIGFBP-3 is in Phase I to evaluate its safety and tolerance in human volunteers.
Insmed’s common stock is expected to be issued March 15, subject to satisfaction of customary conditions. Last month, the company filed a shelf registration statement that would allow it to sell up to $75 million of its common stock, preferred stock or warrants for common or preferred stock.
Insmed granted the underwriters a 3 million share overallotment option. Lazard Capital Markets LLC, of New York, is the offering’s sole book-running manager, with co-management from C.E. Unterberg, Towbin LLC, also of New York.
