Insmed Incorporated (INSM) Q2 2008 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the second quarter 2008 Insmed Incorporated earnings conference call. My name is Lacy and I’ll be your coordinator for today. At this time, all participants are in a listen-only mode. (Operator instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today’s call, Mr. Brian Ritchie with FD. Please proceed.

Thank you, operator. Good morning, everyone. This is Brian Ritchie from FD, and welcome to Insmed’s second quarter conference call. Today, we are joined by Geoff Allan, President and CEO, and Kevin Tully, Executive Vice President and CFO. Geoff will provide a business update, followed by Kevin’s review of the financials. Insmed issued a press release this morning containing second quarter results, which is posted on the company's Web site. If you have questions after the call or would like additional information about Insmed, please contact me at 212-850-5683. 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 webcast. Please go ahead, Geoff.

Thank you, Brian. Good morning, everyone, and welcome to our second quarter conference call. Once again, I am pleased to report that significant progress continues to be achieved within both areas of our business, our follow-on biologics platform and our IPLEX program. I’d like to begin today’s call by expounding on these positive developments. Specifically, I will address the recent INS-19 results; Insmed’s partnership with Former Chairman of the House Ways and Means Committee, Bill Thomas; our retention of RBC Capital Markets as a strategic adviser; the company’s recent meeting with NASDAQ; and, Insmed’s potential near term capital requirements. As the company has stated in the past, Insmed continues to remain at the forefront of the evolving follow-on biologics industry, and is developing one of the most robust follow-on biologics platform in this space. As you know, we have follow-on biologics candidates in various stages of development. And with more than an estimated 250,000 patients in the US being treated for neutropenia with G-CSF and pegylated G-CSF, our two leading programs, INS-19, a follow-on of Neupogen, and INS-20 a follow-on of Neulasta, if approved, will target the market that produced sales of over $4 billion in 2007. Last quarter, I reported that the company has received regulatory approval to initiate a clinical trial for INS-19, and that screening for participants for the phase one study had begun. As announced in early July, this study was rapidly completed, and the results demonstrated bioequivalence between INS-19 and Neupogen. G-CSF blood concentration profiles for the two products were identical. Absolute neutrophil count, the primary pharmacological dynamic marker, the G-CSF products, exhibited the same response profile to dosing with INS-19 as with Neupogen. And this statement complements Insmed’s extensive analytical testing and comparative data from preclinical assessments. To reiterate my comments when this data…

Thank you, Geoff, and good morning, everyone. As Geoff explained, the first quarter was positive in a variety of important areas. To begin, total revenues for the second quarter ended June 30th, 2008 rose $1.3 million to $2.6 million, as compared to $2.3 million for the corresponding period in 2007. The increase was primarily attributable to a $1.4 million improvement in cost recovery from our expanded access program to treat patients with ALS in Italy. This was partially offset by the absence of license income from our agreement with Napo Pharmaceuticals Inc., from which we reserved a milestone payment in the second quarter of 2007. The net loss for the second quarter of 2008 was $4.7 million or $0.04 per share, compared with a net loss of $2.5 million or $0.02 per share in the second quarter of 2007. This was due mainly to a $2.2 million rise in total expenses. This $2.2 million total expense increase was due primarily to a $1.8 million in research and development expenses; a $340,000 increase in selling, general, and administrative expenses; and, realization of a $54,000 non-cash loss on investments. The higher R&D expenses reflected a rise in clinical trial costs during this most recent quarter as our work within our FOB and IPLEX programs intensify. The increase in SG&A expenses was due primarily to higher investor relations and public relations activities. And the realized loss on investment arises from the write down of our investments in Napo. This investment, which is funded by a milestone payment from Napo, was recorded as part of our agreement with Napo in 2007. For the six months ended June 30th, 2008, revenues totaled $5 million as compared with $3.9 million in the first six months of 2007. Consistent with second quarter results, this increase was primarily…

Thank you for your participation in today’s conference. This concludes your presentation. You may now disconnect. Good day.