Insmed (INSM) 8-K Insmed Inc. Reports Financial Results for Fourth Quarter and Twelve Months

Exhibit 99.1

	Contact:
	Haris Tajyar, Investor Relations International
	818-382-9702
	htajyar@irintl.com

Press Release

INSMED INC. REPORTS FINANCIAL RESULTS FOR FOURTH QUARTER AND TWELVE MONTHS

RICHMOND, Va.,(March 15, 2007) – Insmed Incorporated (Nasdaq: INSM), a biopharmaceutical company focused on the development and commercialization of drug candidates for the treatment of metabolic diseases and endocrine disorders with unmet medical needs, today announced results for the three and twelve month periods ended December 31, 2006.

Total revenues for the three months ended December 31, 2006 were $502,000 compared with $24,000 in the corresponding period of 2005. The net loss for the fourth quarter of 2006 was $21.4 million or $0.21 per share, compared to a net loss of $12.9 million or $0.27 per share for the fourth quarter of 2005.

Total expenses for the fourth quarter of 2006 were $21.9 million, compared to $7.1 million for the corresponding quarter of 2005, due primarily to increases in commercial operations, litigation expenses and a $7.1 million asset impairment charge resulting from the expensing of certain capital equipment and inventory.

Total revenues for the full year 2006 were $1.0 million, made up of $0.4 million from commercial sales, $0.4 million in cost recovery from the Expanded Access Program and $0.2 million in royalty income. This compares with $0.1 million in royalty income for the full year 2005. The net loss for all of 2006 was $56.1 million or $0.59 per share, compared to $40.9 million or $0.84 per share for 2005.

Total expenses for the year ended December 31, 2006 were $55.4 million, compared to $27.6 million for 2005, due primarily to increased commercial and litigation expenses coupled with the asset impairment charge.

As of December 31, 2006, the Company had total cash and cash equivalents of $24.1 million, which represents an increase of $5.3 million from December 31, 2005. This net increase was due to $52.5 million in net cash provided by financing activities during the year, partially offset by $47.2 million in net cash used in operating and investing activities during the year. The $52.5 million in cash from financing activities was generated from a combination of $42.8 million in net proceeds from the sale of common stock in March 2006, $9.1 million from the exercise of certain outstanding warrants, $0.6 million from a reduction in a restricted letter of credit and minor employee option conversions.

Looking ahead, in light of the recent settlement of litigation over patent rights to Insmed’s lead drug candidate, IPLEX, the Company expects to refocus its development efforts in 2007 to concentrate on three areas which it believes offer significant opportunities for IPLEX: HIV associated adipose redistribution syndrome (HARS), Myotonic muscular dystrophy (MDD) And Retinopathy of prematurity (ROP). The Company believes it has sufficient cash on hand to fund operations into the fourth quarter of 2007.

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Conference Call

The Company will host a conference call on Thursday, March 15^th. 2007 at 4:30 p.m. Eastern Time to discuss the financial results for the fourth quarter and full year of 2006 and provide a business update.

Interested investors can listen to the call over the internet from Insmed’s investor relations website atwww.insmed.com or by dialling (877) 407-0782 (domestic) or (201) 689-8567 (international).

A telephonic replay of the call will be available for two weeks at (877)-660-6853 (domestic) or (201) 612-7415 (international). The account code is 286: the conference number is 234775. A web replay of the call will be available for two weeks through our corporate website, in the investor relations segment, beginning at 6:00 p.m.

About Insmed Incorporated

Insmed is a biopharmaceutical company focused on the development and commercialization of drug candidates for the treatment of metabolic diseases and endocrine disorders with unmet medical needs. For more information, please visitwww.insmed.com.

Statements included within this press release, which are not historical in nature, may constitute forward-looking statements for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, but are not limited to, statements regarding planned clinical trial design, our regulatory and business strategies, plans and objectives of management and growth opportunities for existing or proposed products. Such forward-looking statements are subject to numerous risks and uncertainties, including risks that product candidates may fail in the clinic or may not be successfully marketed or manufactured, the company may lack financial resources to complete development of product candidates, the FDA may interpret the results of our studies differently than we have, competing products may be more successful, demand for new pharmaceutical products may decrease, the biopharmaceutical industry may experience negative market trends and other risks detailed from time to time in the company’s filings with the Securities and Exchange Commission. As a result of these and other risks and uncertainties, actual results may differ materially from those described in this press release. For further information with respect to factors that could cause actual results to differ from expectations, reference is made to reports filed by the Company with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. The forward-looking statements made in this release are made only as of the date hereof and Insmed disclaims any intention or responsibility for updating predictions or financial guidance contained in this release.

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INSMED INCORPORATED

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

	December 31, 2006			December 31, 2005
Assets
Current assets:
Cash and cash equivalents	$	24,112		$	18,835
Restricted cash		407			285
Accounts receivable, net		241			—
Inventories		576			—
Other current assets		87			83
Total current assets		25,423			19,203
Long-term assets:
Restricted cash —long term		2,708			3,118
Deferred financing costs, net		209			532
Property and equipment, net		8			17
Total long-term assets		2,925			3,667
Total assets	$	28,348		$	22,870
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	7,187		$	968
Accrued project costs & other		1,115			1,990
Payroll liabilities		1,302			1,574
Interest payable		23			52
Deferred rent		54			286
Total current liabilities		9,681			4,870
Long-term liabilities:
Convertible debt		5,125			11,438
Debt discount		(1,964	)		(5,001	)
Net convertible debt		3,161			6,437
Asset retirement obligation		1,626			1,034
Total liabilities		14,468			12,341
Stockholders’ equity:
Common stock; $.01 par value; authorized shares 500,000,000; issued and outstanding shares, 101,328,118 in 2006 and 66,525,792 in 2005		1,013			665
Additional paid-in capital		323,664			264,522
Accumulated deficit		(310,797	)		(254,658	)
Net stockholders’ equity		13,880			10,529
Total liabilities and stockholders’ equity	$	28,348		$	22,870

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INSMED INCORPORATED

Condensed Consolidated Statements of Operations

(in thousands, except per share data—unaudited)

	Three Months Ended December 31						Twelve Months Ended December 31
	2006			2005			2006			2005
Sales	$	452		$	—		$	834		$	—
Royalties		50			24			157			131
Total revenues		502			24			991			131
Operating expenses:
Cost of goods sold		836			—			1,490			—
Asset impairment		7,103			—			7,103			—
Research and development		4,251			5,481			21,089			21,835
Selling, general and administrative		9,716			1,607			25,682			5,730
Total expenses		21,906			7,088			55,364			27,565
Operating loss		(21,404	)		(7,064	)		(54,373	)		(27,434	)
Interest income		528			200			1,937			752
Interest expense		(552	)		(6,021	)		(3,703	)		(14,247	)
Net loss	$	(21,428	)	$	(12,885	)	$	(56,139	)	$	(40,929	)
Basic and diluted net loss per share	$	(0.21	)	$	(0.27	)	$	(0.59	)	$	(0.84	)
Shares used in computing basic and diluted net loss per share		100,634			47,340			95,321			48,742

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INSMED INCORPORATED

Condensed Consolidated Statements of Cash Flows

(in thousands—unaudited)

	Year Ended December 31
	2006			2005
Operating activities
Net loss	$	(56,139	)	$	(40,929	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		3,369			12,897
Non-cash stock acceleration					15
Stock based compensation expense		885			—
Stock options issued for services		79			33
Impairment of property, plant and equipment		5,020
Changes in operating assets and liabilities:
Accounts receivable		(241	)		—
Inventories		(576	)		—
Other assets		(4	)		91
Accounts payable		6,219			(1,653	)
Accrued project costs and other		(875	)		1,106
Payroll liabilities		(272	)		391
Deferred Rent		(232	)		(359	)
Asset retirement obligation		592			591
Interest payable		(29	)		52
Net cash used in operating activities		(42,204	)		(27,765	)
Investing activities
Purchases of property, plant and equipment		(5,020	)		—
Net cash provided by investing activities		(5,020	)		—
Financing activities
Proceeds from issuance of convertible debt with detachable stock warrants		—			35,000
Proceeds from issuance of common stock
Public offering—issuance of 23 million shares		43,240			—
Issuance costs		(421	)		—
Warrants converted into shares		9,069			—
Other		325			4,621
Total proceeds from issuance of common stock		52,213			39,621
Costs incurred in conjunction with issuance of debt		—			(2,428	)
Cash restricted to restricted letters of credit		288			185
Net cash provided by financing activities		52,501			37,378
Increase in cash and cash equivalents		5,277			9,613
Cash and cash equivalents at beginning of year		18,835			9,222
Cash and cash equivalents at end of year	$	24,112		$	18,835
Supplemental information
Cash paid for interest	$	319		$	1,104

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