Via Facsimile and U.S. Mail
Mail Stop 03-09
April 15, 2005
Kevin P. Tully, C.G.A.
Treasurer and Controller
Insmed Incorporated
4851 Lake Brook Drive
Glen Allen, Virginia 23060
Re: Insmed Incorporated
Form 10-K for the fiscal year ended December 31, 2004
File No. 000-30739
Dear Mr. Tully:
We have reviewed your filing and have the following
comments.
We have limited our review of the above referenced filing to only
those issues addressed. Where our comments call for disclosure,
we
think you should amend your documents in response to these
comments.
In one of our comments, we ask you to provide us with supplemental
information so we may better understand your disclosure. Please
amend your Form 10-K for the fiscal year ended December 31, 2004
and
respond to these comments within 15 business days or tell us when
you
will provide us with a response prior to the expiration of the 15-
day
period. If we have requested additional information as well as an
amendment or if you disagree with any comment that calls for
disclosure, please provide this letter prior to your amendment.
You
may wish to provide us with marked copies of the amendment to
expedite our review. Your letter should key your responses to our
comments. Detailed letters greatly facilitate our review. Please
file your letter on EDGAR under the form type label CORRESP.
Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-K for the fiscal year ended December 31, 2004
Management`s Discussion And Analysis Of Financial Condition And
Results Of Operations, page 35
1. We believe that your disclosures about historical research and
development expenses and estimated future expenses related to your
major research and development projects could be enhanced for
investors. Please refer to the Division of Corporation Finance
"Current Issues and Rulemaking Projects Quarterly Update" under
section VIII - Industry Specific Issues - Accounting and
Disclosure
by Companies Engaged in Research and Development Activities. You
can
find it at the following website address:
http://www.sec.gov/divisions/corpfin/cfcrq032001.htm.
Please expand your MD&A to disclose the following information for
each of your major research and development projects.
a. The costs incurred during each period presented and to date on
each project;
b. The nature, timing and estimated costs of the efforts necessary
to
complete each project;
c. The anticipated completion dates of each project;
d. The risks and uncertainties associated with completing
development
on schedule, and the consequences to operations, financial
position
and liquidity if each project is not completed timely; and
finally
e. The period in which material net cash inflows from significant
projects are expected to commence for each project.
Regarding a., if you do not maintain any research and development
costs by project, disclose that fact and explain why management
does
not maintain and evaluate research and development costs by
project.
Provide other quantitative or qualitative disclosure that
indicates
the amount of the company`s resources being used on the project.
Regarding b. and c., disclose the amount or range of estimated
costs
and timing to complete the phase in process and each future phase.
To
the extent that information is not estimable, disclose those facts
and circumstances indicating the uncertainties that preclude you
from
making a reasonable estimate.
Notes To Consolidated Financial Statements
Note 1. Description of the Business and Summary of Significant
Accounting Policies
Research and Development, page F-9
2. Please expand your discussion of Research and Development to
specifically address and distinguish the separate accounting
policies
for internal research and development expenditures, research and
development conducted for others, and research and development
services for which you have contracted.
Recent Accounting Pronouncements, page F-10
3. Regarding your discussion of SFAS 123(R), your statement
"Insmed
Incorporated is unable to estimate what those amounts will be in
the
future because they depend on, among other things, when employees
exercise stock options" is confusing. In this regard, it is
unclear
how the timing of when employees exercise options would impact
your
accounting under SFAS 123(R). As such, please supplementally
explain
this to us, by providing specific references to SFAS 123(R) that
support this disclosure. Otherwise, please provide us with the
revisions that you would propose making to this disclosure so that
it
would comply with SEC Staff Topic 11M (SAB 74).
* * * *
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Jim Peklenk, Staff Accountant, at (202) 824-
5343, or Oscar Young, Staff Accountant, at (202) 942-2902, if you
have questions regarding the comments. In this regard, do not
hesitate to contact me, at (202) 942-1803.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief
Accountant
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Kevin P. Tully
Insmed Incorporated
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