Insmed (INSM) wowed investors this past week as its shares more than doubled, leaping 150% after the Bridgewater, NJ-based drug developer announced plans to file for its second approval with the FDA later this year based on positive Phase III data that a pair of analysts hailed as launching no less than “a new era” in treating neutrophil-mediated diseases.

Shares of Insmed rocketed 118.5% on Tuesday, from an even $22 to $48.06, then rose another 11% Wednesday to $53.55, followed by a 1% gain Thursday to $56.98 before sinking 3% the following day to $55.05 on profit taking.

Insmed’s stock surge this week followed its declaration that it will pursue a New Drug Application (NDA) with the FDA in the fourth quarter seeking approval for brensocatib to treat patients with bronchiectasis. The company expects to launch brensocatib in the U.S. sometime in mid-2025, to be followed in the first half of 2026 by launches in Europe and Japan.

“We now look forward to further analyzing the data while rapidly advancing toward regulatory filings in our key regions, where we believe approximately one million bronchiectasis patients may benefit from an approved treatment,” Martina Flammer, MD, MBA, Insmed’s chief medical officer, said in a statement.

Insmed said brensocatib met the primary endpoint of the Phase III ASPEN trial (NCT04594369) assessing the drug in patients with non-cystic fibrosis bronchiectasis (NCFB), with both dosage strengths of brensocatib (10 mg and 25 mg) showing statistically significant reductions in the annualized rate of pulmonary exacerbations (PEs) vs. placebo—a 21.1% drop for 10 mg, a 19.4% decline for 25 mg.

“We are impressed that both doses achieved p<0.01 on the reduction in pulmonary exacerbation showcasing brensocatib’s undeniable merit in NCFB,” Joseph P. Schwartz, Senior Managing Director, Rare Diseases and a senior research analyst with Leerink Partners, and Joori Park, PhD, equity research vice president, wrote Thursday in a research note.

“A new era’

Schwartz and Park also declared that the ASPEN trial results “opens a new era for neutrophil-mediated diseases.”

The 10 mg dose also outperformed 25 mg on two of five secondary endpoints—Prolongation of time to first PE (18.7% vs. 17.5%) and increase in odds of remaining exacerbation free over 52 weeks (41.2% vs. an even 40%). However, the larger dosage fared better on the other three secondary endpoints:

  • Change from baseline in post-bronchodilator forced expiratory volume in one second (FEV1) at week 52—38 mL for 25 mg, 11 mL for 10 mg.
  • Reduction in annualized rate of severe Pes—26.0% for 25 mg, 25.8% for 10 mg.
  • Change from baseline in the Quality of Lifem, based on bronchiectasis (QOL-B) respiratory score at week 52—3.8 points for 25 mg, 2,0 points for 10 mg.

“We find it remarkable that brensocatib may modify the course of the disease by slowing down lung function decline with the 25mg dose,” Schwartz and Park said. “We are encouraged by the quality-of-life improvements with the 25mg dose that could boost adoption, since patients who feel better are likely to take and stay on the drug.”

Brensocatib achieved statistical significance for two secondary endpoints for the 10mg dose and three secondary endpoints for the 25mg dose.

“These findings not only underscore our belief that brensocatib has the potential to transform the treatment landscape for bronchiectasis, but they also further validate DPP1 inhibition as a mechanism that may hold promise in other neutrophil-mediated diseases,” Flammer stated.

Schwartz and Park asserted that brensocatib’s positive data, derisks Insmed’s regulatory path in NCFB, and is poised to change the character of the company significantly.

For one thing, the analysts perceive the potential for “blockbuster” sales ($1 billion or more annually) in NCFB alone, based on the company’s 1 million patient global estimate. That figure consists of 450,000 patients in the U.S., 400,000 in the European Union, and 150,000 in Japan.

No drugs have yet been approved to treat NCFB.

“Tip of the iceberg”

“However, diagnosed NCFB may just be the tip of the iceberg, which could expand several-fold with a simple CT scan, potentially identifying more NCFB patients who are currently diagnosed with COPD,” Schwartz and Park.

Unlike NCFB, the patient population for COPD numbers several million, potentially. COPD prevalence ranges from 14.2 million patients in the U.S. as of 2021, according to the U.S. Centers for Disease Control and Prevention, to an estimated 36.58 million Europeans (2021 study), to “at least six million” in Japan (another 2021 study).

In addition to NCFB, brensocatinib is also in Phase II development in chronic rhinosinusitis without nasal polyps (CRSsNP); and has completed Phase I in hidradenitis suppurativa (HS). Insmed’s pipeline also includes Treprostinil Palmitil inhalation powder, which has completed Phase II for pulmonary hypertension associated with interstitial lung diseases (PH-ILD) and is in Phase II for pulmonary arterial hypertension (PAH)—as well as nine preclinical programs:

  • INS1201, a gene therapy for Duchenne muscular dystrophy.
  • Gene therapies for Stargardt disease, argininosuccinic aciduria (ASA), amyotrophic lateral sclerosis (ALS), and undisclosed multiple indications.
  • Deimmunized therapeutic proteins for chronic refractory gout, and undisclosed multiple indications.
  • A synthetic rescue program designed to treat ataxia telangiectasia (AT).
  • An early-stage research program exploring undisclosed multiple indications.

Until now, Insmed’s focus has been on rare diseases. Its sole marketed drug, Arikayce® (amikacin liposome inhalation suspension) is indicated for treating patients with refractory nontuberculous mycobacterial (NTM) lung disease caused by mycobacterium avium complex (MAC). Arikayce accounted for all of Insmed’s total 2023 revenue of $305.208 million, up 24% from $245.358 million in 2022. For Q1, Arikayce generated $75.5 million, up 15% from $65.214 in the year-ago quarter.

Arikayce is also in Phase III development in MAC lung disease.

As Insmed widens its focus beyond rare disease, the Leerink Partners analysts wrote, it will in turn expand its drug development horizons toward diseases with larger patient populations—and thus greater sales potential for brensocatib.

Blockbuster territory

That could place Insmed into the sales ranges of at least two top-selling blockbuster monoclonal antibodies, Dupixent® (adalimumab), co-marketed by Sanofi and Regeneron Pharmaceuticals; and Humira® (adalimumab), marketed by AbbVie.

Dupixent finished last year with €10.715 billion ($11.63 billion) in sales recorded by Sanofi, up 38% from 2022, followed by €2,835 billion ($3.078 billion) in the first quarter, up 25% from Q1 2023.

Humira racked up $14.404 billion last year for AbbVie—though that figure is down about 35% from 2022. During Q1, Humira’s $2.27 billion in net revenues marked a 36% drop. AbbVie blames both declines on competition from biosimilars, which began with Amgen’s launch of Amjevita™ (adalimumab-atto) in January 2023.

Amjevita finished last year with $626 million in product sales, up 36% from $460 million in 2022; and $168 million in first quarter 2024 sales, up 2% from $164 million in Q1 2023.

“It might be too early to tell, but the opportunity with brensocatib reminds us of REGN’s Dupixent and even ABBV’s Humira, with several additional development opportunities possible now that ASPEN succeeded,” Schwartz and Park of Leerink Partners commented.

One factor in brensocatib’s future sales will be its price per treatment course. The Leerink analysts noted that Insmed previously said the drug will be priced comparably to AstraZeneca’s severe asthma drug Fasenra® (benralizumab)—a price they estimated to be ~$40,000.

Schwartz and Park also raised their 12-month price target on Insmed shares 34%, from $56 to $75. The Leerink analysts joined analysts from 10 other firms in increasing their price targets:

  • Barclays (Leon Wang)—Up 58% from $40 to $63, maintaining “Overweight” rating.
  • BofA Securities (Jason Zemansky)—Up 55% from $40 to $62, maintaining “Buy” rating.
  • Goldman Sachs (Andrea Tan)—Up 51% from $49 to $74, maintaining “Buy” rating.
  • H.C. Wainwright (Andrew Fein)—Up 35% from $52 to $70, maintaining “Buy” rating.
  • J.P. Morgan (Jessica Fye)—Up 53% from $36 to $55, maintaining “Overweight” rating.
  • Stifel (Stephen Willey)—Up 72%, from $39 to $67, maintaining “Buy” rating.
  • TD Cowen (Ritu Baral)—Up 49% from $45 to $67, maintaining “Buy” rating.
  • Truist Securities (Nicole Germino)—Up 42% from $48 to $68, maintaining “Buy” rating.
  • UBS (Trung Huynh)—Up 26% from $46 to $58, maintaining “Buy” rating.
  • Wells Fargo (Tiago Fauth)—Up 40% from $55 to $77, maintaining “Overweight” rating.
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