Insmed (INSM) 8-K Developing Innovative Inhaled Treatments for Serious

Developing Innovative Inhaled Treatments for Serious

Lung Infections

November 2011

This presentation contains forward-looking statements which are made pursuant to provisions of

Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that such statements in

this presentation, including statements relating to our financial position, results of operations, the

status and the results of preclinical studies and clinical trials and preclinical and clinical data described

herein,

the

timing

of

responses

to

information

and

data

requests

from

FDA,

the

development

of our

products, and the business strategies, evaluations, plans and objectives of management, constitute

forward-looking statements which involve risks and uncertainties that could cause actual results to

differ materially from those anticipated by the forward-looking statements.  Our results may be

affected by such factors as the receipt and timing of FDA and other regulatory reviews and approvals,

if at all, competitive developments affecting our product development, delays in product development

or clinical trials, and patent disputes involving currently developing products.  The risks and

uncertainties include, without limitation, we may experience unexpected regulatory actions, delays or

requests, our future clinical trials may not be successful, we may be unsuccessful in developing our

product candidates or receiving necessary regulatory approvals, we may experience delays in our

product development or clinical trials, our product candidates may not prove to be commercially

successful, our expenses may be higher than anticipated and other risks and challenges detailed in our

filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K

for

the

year

ended

December

31,

2010

and

our

Quarterly

Report

on

Form

10-Q

for

the

quarter

ended

September 30, 2011.  Investors are cautioned not to place undue reliance on any forward-looking

statements

which

speak

only

as

of

the

date

of

this

presentation.

We

undertake

no

obligation

to

publicly release the results of any revisions to these forward-looking statements that may be made to

reflect events or circumstances that occur after the date of this release or to reflect the occurrence of

unanticipated events.

Safe Harbor Statement

2

Insmed: Value Proposition

Attractive

Late-Stage

Opportunity

Arikace®

(liposomal amikacin for inhalation), is Phase 3-ready for cystic

fibrosis

(CF)

Pseudomonas

and

Phase

2-ready

for

non-TB

mycobacteria

(NTM) lung infections

Amikacin is an FDA-approved antibiotic, long recognized as one of the most

effective treatments for gram-negative infections

Arikace has strong Phase 2 efficacy and safety data in CF

Compelling

Business Model

Arikace

has

global

annual

market

potential

of

over

$1

Billion

in

CF

and

NTM

Limited commercial infrastructure required

Orphan drug indications with high unmet need

Strong IP and potential for extended exclusivity

Strong Balance

Sheet &

Experienced

Management

As of end of 3Q 2011, company had ~$85 million in cash and no debt

Over

150

years

of

combined

experience

in

pharmaceutical

industry

and

drug development

Arikace®

is a potentially highly differentiated product opportunity that

offers a compelling business model in two orphan diseases

* Arikace®

is a registered trademark of Insmed Corporation

3

Arikace®

—

Update on Clinical Hold

Insmed announced in October 2011 that the FDA is continuing the clinical hold placed

in August 2011 on the Phase 3 clinical trials for Arikace in CF and NTM. The Agency

stated that based on the information provided to date it has insufficient information

to assess the risks of Arikace in CF and NTM patients following the results of a long

term rat inhalation study.

Agency has requested that Insmed conduct a 9-month inhalation dog toxicity study of Arikace

to determine if the findings in the rat inhalation carcinogenicity study are also demonstrated

in a non-rodent model, and to identify a more targeted CF patient population/disease state

where the risk profile of Arikace may be more favourable

Insmed was informed during further dialogue with the Agency that, if the Company chooses to

proceed, the required 9-month dog inhalation toxicity study of ARIKACE can be conducted in

parallel with the CF phase 3 clinical trials in human subjects

FDA is requiring that Insmed conduct a phase 2 clinical trial in

adult NTM patients intended to

provide proof-of-concept efficacy and safety data for ARIKACE in NTM before the Company can

proceed with a phase 3 clinical trial.

Based on the efficacy and safety data generated from the Phase 2

clinical trial program,

Insmed continues to believe Arikace®

has the potential to be an important treatment option

for CF and NTM patients

Insmed continuing with evaluation of potential next steps with ARIKACE program

4

Arikace®: Amikacin Summary

Amikacin is an FDA-approved antibiotic with proven efficacy in the

treatment of gram-negative infections, including Pseudomonas and NTM

Member of the aminoglycoside

class of antibiotics

The value of the IV use has been

limited by issues of nephro-

toxicity and ototoxicity

Arikace (liposomal amikacin for inhalation) delivers high, sustained levels of drug to

the lung while reducing systemic exposure to well below established toxicity levels

5

Arikace: Proprietary Liposomal Formulation

Engineered Specifically for Lung Delivery

Prolonged lung residence time

Minimal systemic exposure

Biofilm penetration

Preferential uptake into macrophages 

Benefit

Arikace delivers the potency of Amikacin at the site of lung infection while

minimizing potential systemic toxicity

Potential

for

greater

efficacy

Addresses safety concerns

Once-a-day dosing and

potential for greater efficacy

Potential

for

greater

efficacy

Lipid Polar Head Groups

(at Both Surfaces)

Lipid Hydrophobic Chains

(Bi-Layer Interior)

Water Core (where Amikacin resides)

Arikace: Delivery Using Proprietary eFlow

®

Technology

Arikace is delivered once daily via the state-of-the-art PARI Optimized,

Investigational eFlow Nebulizer System with Advanced Mesh Technology

Fast

drug delivery with efficient

lung deposition

Small, portable, silent and

cordless

device weighs less than

10 ounces.

eFlow Technology Device

exclusivity

from PARI Pharma for

15 years after first commercial

sale of Arikace

* eFlow

®

is a registered trademark of PARI Pharma GmbH

6

7

Arikace—Cystic Fibrosis

Epidemiology and Disease Description

Cystic fibrosis is a life-threatening disease with significant unmet needs

that is growing in prevalence

Affects about 30,000 children

and adults in the U.S. (70,000

worldwide)

Inherited disease that causes

thick, sticky mucus to build up

in the lungs

Despite expanded use of current

products, lung function often

continues to decline

High treatment burden

major compliance issue

20

25

30

35

40

45

1985

2008

U.S. CF Patients

Median Predicted Survival Age

Source:  Adapted from Cystic Fibrosis Foundation, Patient Registry

2008 and 2007 Annual Reports, Bethesda, Maryland.

8

Arikace—Cystic Fibrosis

Need for New Inhaled Antibiotics

Current inhaled antibiotics produce modest efficacy in a limited

patient

population providing an opportunity for Arikace to become first-line

treatment

Current inhaled antibiotics are not indicated for a significant segment of

the CF population --

patients with FEV-1 % predicted of greater than 75%

Efficacy of current inhaled antibiotics declines from cycle to cycle and is

not sustained in the off-treatment period

Lung function continues to decline at an average of 1% to 3% per

year with

some patients experiencing much greater declines

9

Aztreonam vs. Tobi

®

(inhaled tobramycin)

CF Phase 3 Trial Results: Pulmonary Function

Source:  2010 North American CF Conference Poster 305 and Slide Presentation, 10/10.

•Tobi

®

(Tobramycin Inhalation Solution) is a registered trademark of Novartis.

** AZLI = Aztreonam; TIS = Tobi

®

Lung function returned to baseline or lower during each off treatment

period and at the end of 24 weeks, both treatment groups showed a

decline in lung function from baseline

Lung Function

Adjusted

Mean

Relative

Change

in

FEV

1

%

Predicted

Week:

2

AZLI

TIS

+ 7.8

P

= 0.0001

95% CI (3.86, 11.73)

AZLI/

TIS

28 Days

AZLI/

TIS

28 Days

AZLI/

TIS

28 Days

10

Arikace—Cystic Fibrosis

Phase 2 Pooled Results (560mg QD): Pulmonary Function

Mean (SE)

Arikace demonstrated statistically significant and clinically meaningful

improvement in pulmonary function throughout the 28-day treatment

period that was sustained through the off-treatment period

P = 0.033

P = 0.003

(36/36)

(36/35)

(33/36)

(32/35)

(34/35)

(34/34)

(N=Arikace/Placebo)

3%

0%

3%

6%

9%

12%

15%

18%

0

7

14

21

28

56

6%

Arikace

560mg

Placebo

Visit Day

% Change in FEV

(ml) vs. Baseline

(N)

1

11

Visit Days

Patients

Receiving

560

mg

Arikace

®

Once

Daily

for

28

Days

and

Off-Treatment

for

56

Days

Arikace—Cystic Fibrosis

Open Label Extension (TR02-105): Duration of Response

Treatment

Period

*   Significance at end of treatment over 6 cycles

** Significance 56 days off-treatment over 6 cycles

An open label extension study TR02-105 demonstrated the sustained efficacy

Of Arikace during and between multiple cycles of therapy

0

5

10

15

20

14

28

56

70

85

98

112

140

154

169

182

196

224

238

253

266

280

308

322

337

350

364

392

406

421

434

448

476

490

504

42

41

42

42

41

41

41

41

41

45

N=

45

47

46

44

45

47

46

46

45

44

44

44

43

43

43

43

44

43

45

p=0.0001**

p<0.0001*

41

47

Cycle

1

Cycle

2

Cycle

3

Cycle

4

Cycle

5

Cycle

6

12

Arikace—Cystic Fibrosis

Phase III Program (pending FDA review and lifting of clinical hold)

Insmed had reached agreement with FDA and EMA on NDA/MAA path for CF

Patients with Pseudomonas lung infections

One E.U. Phase 3 (Arikace vs Tobi

®

Study, N = 300)

–

Primary End-Point: Relative Change in FEV-1 at week 24

•

Key Secondary End-Point: Time to Pulmonary Exacerbation

•

Key inclusion Criteria: FEV-1 % Predicted > 25%

–

Approximately 260 patients required to demonstrate non-inferiority at agreed upon

margin with 80% power

One U.S. Phase 3 (Arikace vs Placebo Study, N = 300)

–

Primary End-Point: Time to Pulmonary Exacerbation

•

Key Secondary End-Point: Relative Change in FEV-1

•

Key inclusion Criteria: FEV-1 % Predicted > 25%

–

Approximately 260 patients required to demonstrate superiority with 80% power

–

Estimate 50% reduction in frequency of exacerbations

–

Prospectively planned to evaluate pooled event rate to assess adequacy of sample

13

Arikace—Non-TB Mycobacteria

Epidemiology and Disease Description

Diagnosis of NTM pulmonary

infections are growing

rapidly

Current treatment

approaches have limited

efficacy and are associated

with significant toxicity

Mean age of 66 years

66% treated with

antibiotics; mean of 7.6

courses per year

Average Length of Inpatient

Hospital Stay = 10.2 days

Non-TB mycobacteria (NTM) is an intracellular pathogen that can cause

severe pulmonary disease with limited effective treatment options

Source:  SDI Healthcare Database, July 2009.

Total U.S. Patients Diagnosed with Non-TB Mycobacteria

Pulmonary Disease

32.0K  +20%

2-Yr Growth

14.4K  +7%

2-Yr Growth

14

Arikace—Non-TB Mycobacteria

Phase 2 Program (pending FDA review and lifting of clinical hold)

Trial Design and Patient Population:

–

Randomized, double-blind, placebo controlled phase 2 study in patients with

recalcitrant/persistent NTM lung disease who are on a stable ATS/IDSA

guidelines-based multi-drug treatment regimen

–

Patients receive Arikace or placebo daily for 84 days; then all patients can

receive Arikace 560 mg in an open-label manner for an additional 84 days

Key Inclusion Criteria:  History of chronic infection with either Mycobacterium avium

complex or Mycobacterium abscessus or mixed infection with both species

Primary endpoint:  Change in mycobacterial culture results from baseline to end of

treatment [Time

Frame:

84 days]

High unmet medical need enables a phase 2 program consisting of a single

study of approximately 100 patients

15

Projected Cash

at year end

2011

Approximately $72 to $75 million currently forecast

Current Overview: Capital Structure and Key Financials

Pro Forma

Balance Sheet

Pro forma cash of ~$85 million as of September 30, 2011

No Debt

Present Capital

Structure

25.8 M fully diluted shares following reverse stock split:

24.8 million Common Shares

1.0 million options, restricted stock and warrants

Insmed has a strong cash position and no debt

16

Insmed: Value Proposition

Attractive

Late-Stage

Opportunity

Arikace®

(liposomal amikacin for inhalation), is Phase 3-ready for cystic

fibrosis

(CF)

Pseudomonas

and

Phase

2-ready

for

non-TB

mycobacteria

(NTM) lung infections

Amikacin is an FDA-approved antibiotic, long recognized as one of the most

effective treatments for gram-negative infections

Arikace has strong Phase 2 efficacy and safety data in CF

Compelling

Business Model

Arikace

has

global

annual

market

potential

of

over

$1

Billion

in

CF

and

NTM

Limited commercial infrastructure required

Orphan drug indications with high unmet need

Strong IP and potential for extended exclusivity

Strong Balance

Sheet &

Experienced

Management

As of end of 3Q 2011, company had ~$85 million in cash and no debt

Over

150

years

of

combined

experience

in

pharmaceutical

industry

and

drug development

Arikace®

is a potentially highly differentiated product opportunity that

offers a compelling business model in two orphan diseases