Insmed Incorporated (NASDAQ: INSM) is having a relatively strong day in the market today. However, this is not the usual reaction we expect to see in the market. The company announced the price of a public offering, something that generally causes declines. Nonetheless, there’s good reason that the stock continues to gain. Before we get into all that, we’d like to give a big thank you to our friends at Trade Ideas for being the first to alert us to the gains. At the moment (11:16), INSM is trading at $30.46 per share after a gain of $1.10 per share (3.75%) thus far today.
INSM Announces Pricing Of Public Offering
As mentioned above, Insmed is having a strong day in the market today, which is a surprising reaction to the announcement they made with regard to a public offering. The company said that it would be offering 12,281,000 shares of its common stock in a registered underwritten public offering at a price of $28.50 per share. It is expected that gross proceeds before deducting underwriting discounts and commissions are expected to be $350 million. Also, INSM has granted the underwriters of the offering the option to purchase an additional 1,842,150 shares of common stock at the offering price minus underwriting discounts.
In the release, INSM said that it intends to use the net proceeds from the offering in order to fund continuing efforts surrounding amikacin liposome inhalation suspension, also known as ALIS. ALIS is a treatment designed for patients with refractory nontuberculous mycobacteria (NTM) lung disease caused by Mycobacterium Avium Complex (MAC). The funding will be used for future clinical development as well as regulatory efforts surrounding ALIS. The funding will also help the company with regard to investing in increased third-party manufacturing capacity for commercial inventory production of ALIS in anticipation of a commercial launch. The funds will also be used by INSM to continue development of INS1007 as well as fund working capital, potential debt repayment, capital expenditures, general research and development, and other corporate purposes.
Why INSM Is Gaining Today
As mentioned above, public offerings are not a good thing for stock values, in general. However, in this particular case, investors don’t seem to be worried about the offering, as there is plenty to look forward to. This is largely because the company recently released positive Phase 3 clinical trial results surrounding ALIS, which will likely lead to a New Drug Application with the United States FDA. With such strong results from the trial, INSM said that it intends to pursue accelerated approval, which shouldn’t be difficult considering that the treatment has already been granted breakthrough therapy designation. In a statement, Will Lewis, President and CEO at Insmed, had the following to say with regard to the results:
“We consider these compelling top-line data to be a remarkable accomplishment in a rare disease state with no currently approved therapies… We are particularly encouraged by the consistency of these data when compared with our Phase 2 study results, and look forward to additional data as the CONVERT study continues over the next two years. We want to thank all the patients who participated in this trial around the world as well as the physicians who supported them. Treatment of this serious and potentially debilitating disease is an unmet medical need, and we expect these important data will enable us to submit for accelerated approval.”
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on INSM. In particular, we’re interested in following the ongoing work surrounding ALIS as well as INS1007. We’ll continue to follow the story closely and bring the news to you as it breaks!
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