Insmed (INSM) Stock: Here’s Why It’s Falling


Insmed Incorporated (NASDAQ: INSM)

Insmed is having an incredibly hard time in the market today, and for good reason. The company announced that it has withdrawn a Marketing Authorization Application with the European Medicines Agency. Today, we’ll talk about the news, how the market reacted, and what we can expect to see from INSM moving forward.

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INSM Withdraws MAA Application

As mentioned above, Insmed is having a tough time in the market today after withdrawing a MAA from the European Medicines Agency. The application that has been withdrawn surrounds ARIKAYCE for the treatment of nontuberculous mycobacteria (NTM) lung disease.

The reason the application has been withdrawn is relatively simple. The application was based on data from a Phase 2 study looking into the treatment. These results were examined during the Committee for Medical Products for Human Use May 2016 meeting. Unfortunately, the Committee found that there was not a sufficient amount of evidence from the Phase 2 study in order to support an approval from the European Medicines Agency. As a result, INSM has made the decision to withdraw the MAA and resubmit it later with data from an ongoing Phase 3 global study when the data becomes available. In a statement, Will Lewis, President and CEO at INSM, had the following to offer:

We remain on track to complete patient enrollment later this year in our landmark global phase 3 CONVERT study… ARIKAYCE has the potential to make a significant difference to patients whose NTM lung disease persists despite long-term courses of multi-drug regimens. We are committed to achieving our ultimate goal of making ARIKAYCE available to patients in the US, Europe, and Asia who are living with the devastating effects of this disease.”

How The Market Reacted To The News

As investors, one of the first things we learn is that the news moves the market. Any time there is positive news released with regard to a publicly-traded company, we can expect to see gains in the value of the stock associated with the company. Unfortunately however, the news that was released with regard to INSM was anything but positive. By making the decision to withdraw the application with the European Medicines Agency, the company has effectively delayed the approval of this treatment, which in turn will delay revenue. As a result, we’re seeing declines in the value of the stock today. Currently (11:46), the stock is trading at $11.36 per share after a loss of $0.66 per share, or 5.45%, thus far today.

What We Can Expect To See Moving Forward

While, in the short term, we may see further declines, in the long run, I maintain a relatively bullish opinion with regard to what we can expect to see from INSM. At the end of the day, the company is doing a great job with ARIKAYCE. Although the MAA was delayed, it wasn’t withdrawn forever. In all reality this is a much better way to go. The company is essentially getting its ducks in a row before resubmitting the application. Nonetheless, the results from the Phase 2 study were promising, and I’m expecting for the results from Phase 3 to be just as positive. All in all, it seems as though this stock is headed up in the long run.

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