Exhibit 99.1
INSMED INCORPORATED ANNOUNCES IMPROVED
FINANCIAL RESULTS FOR FIRST QUARTER 2003
Narrowing of Net loss Exceeds Expectations; Cash Burn Rate Drops Sharply
Highlights:
o Net loss of ($2.2 million) is $0.2 million lower than prior guidance
o Average monthly cash burn rate of $740,000 beats stated goal of $1
million for quarter
o Burn rate down 75% from Q1 2002 and 42% sequentially
o Cash position now exceeds level required for execution of product
strategy
RICHMOND, VA - (May 2, 2003) - Insmed Incorporated (Nasdaq/NMS: INSM), a leading
developer of pharmaceutical products for the treatment of metabolic and
endocrine diseases with unmet medical needs, today announced results for the
first quarter ended March 31, 2003. The reduction of net loss surpassed prior
expectations, and the net loss and cash burn rate were significantly improved
from both Q1 2002 and sequentially.
Revenues for the three months ended March 31, 2003 were $62,000, compared with
revenues of $102,000 for the equivalent period in 2002. The net loss for the
three months ended March 31, 2003 was ($2.2 million), or ($0.07 per share),
which represents an improvement of $0.2 million from the earlier guidance given
in the Company's press release dated April 8, 2003. The first-quarter 2003 net
loss also was $3.9 million less than the ($6.1 million) or ($0.19 per share)
loss reported for the corresponding period in 2002.
Sequentially, first quarter 2003 revenues were up 138% from the $26,000 reported
in the fourth quarter of 2002. The net loss per share of ($0.07) for the first
quarter of 2003 was down 88% from the net loss per share of ($0.56) in the
fourth quarter of 2002.
Cash Cover Strengthens
The average monthly cash burn rate, a key measure of Insmed's ability to carry
out its strategy for getting its lead drug candidate to market, dropped
substantially from both the corresponding quarter in 2002 and from the prior
quarter. For the first fiscal quarter of 2003, the rate came in at $740,000 per
month, down $2.2 million per month, or 75%, from the average monthly burn rate
during the first quarter of 2002. Sequentially, the first-quarter 2003 average
rate was down 42% from the $1.3 million average in the fourth quarter of 2002.
As of March 31, 2003, Insmed reported cash and cash equivalents of $25.1
million. For the balance of the year the Company believes it is well positioned
to deliver an average monthly cash burn rate below the $1.0 million per month
level which was previously indicated. This would allow the Company to maintain
its current operations for at least two years without any new cash infusions.
Company Strategy On-Track
"The latest financial results show that the execution of the company's growth
strategy is going even better than expected," said Dr. Geoffrey Allan, Chairman
and Chief Executive Officer of Insmed Incorporated. "We have comfortably
exceeded our stated goal of bringing our cash burn rate down to $1 million per
month, and we are on track in putting our lead product candidate,
rhIGF-I/rhIGFBP-3, through the process of clinical trials and Food and Drug
Administration (FDA) approval. We believe our healthy cash position and
continued control of operating costs makes us even more confident that we can
meet our goal of introducing that product to the market in the second half of
2004."
Dr. Allan noted that rhIGF-I/rhIGFBP-3, a proprietary delivery composition of
insulin like growth factor-I (IGF-I), is already being used in Scandanavia
through a named patient program for treatment of growth hormone insensitivity
syndrome (GHIS). He indicated that several other European countries are expected
to authorize the product in
similar programs for selected patients. Insmed Incorporated is seeking FDA and
European Medical Evaluation Agency (EMEA) approval to market rhIGF-I/rhIGFBP-3
as a treatment for GHIS in both the U.S. and Europe.
Discussion of Revenue and Expense Items
The reduction in revenues of $40,000 for the first quarter 2003 compared to the
first quarter of 2002 was due to the elimination of international license fees
for INS-1, which was discontinued in September 2002. The $3.9 million
improvement in the net loss for the first quarter 2003 compared to the
corresponding period in 2002 was driven by a reduction in research and
development costs of $4.1 million as the Company prepares for the initiation of
a pivotal Phase III trial of rhIGF-I/rhIGFBP-3 in GHIS. That trial is expected
to begin in the second quarter of 2003, with a six-month interim analysis of the
results due to be completed in early in 2004. On this timetable, the Company
believes that FDA approval for use of rhIGF-I/rhIGFBP-3 in GHIS would come
during the second half of 2004.
The $4.1 million reduction in research and development costs, to $1.6 million in
the first quarter of 2003 from $5.7 million in the corresponding period of 2002,
stemmed primarily from the end of research and development for INS-1. In the
first quarter of 2002, the Company was involved in four clinical trials for
INS-1. These were completed in September 2002. The drop in research and
development costs was partially offset by both increases in general and
administrative expenditures of $82,000 and $110,000 in lower interest income,
for the first quarter of 2003 compared to the corresponding period in 2002. The
former is due to a larger allocation of the fixed shared expenses, while the
latter occurred as a result of the decline in interest rates and cash invested.
Conference Call
- ---------------
The Company will host a conference call on May 2, 2003 at 11:00 a.m. Eastern
Time (10:00 a.m. Central Time). To participate in the conference call dial
800-915-4836 (domestic) or 973-317-5319 (international). The call will be
webcast live through Insmed's corporate website: www.insmed.com. A telephonic
replay of the call will be
available for one week at 800-428-6051 (domestic) or 973-709-2089
(international) Passcode:290087 A web replay of the call will be available
through the corporate website beginning at 10:00a.m.
About Insmed Incorporated
- -------------------------
Insmed Incorporated is a biopharmaceutical company focused on the development of
drug candidates for the treatment of metabolic diseases with unmet medical
needs. For further information about Insmed and the rhIGF-I/rhIGFBP-3 complex,
please visit the company's corporate website at www.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 include all statements regarding expected financial
position, results of operations, cash flows, dividends, financing plans,
business strategies, operating efficiencies or synergies, budgets, capital and
other expenditures, competitive positions, growth opportunities for existing or
proposed products or services, plans and objectives of management, demand for
new pharmaceutical products, market trends in the pharmaceutical business,
inflation and various economic and business trends. 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,
the company may lack financial resources to complete development of product
candidates, 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. Because of
these and other risks and uncertainties, actual results may differ materially
from those described in this press release.
INSMED INCORPORATED
Condensed Consolidated Balance Sheets
(in thousands)
March 31, December 31,
2003 2002
---------------------------------------------
(Unaudited)
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Assets
Current assets:
Cash and cash equivalents $ 25,116 $ 27,337
Due from Taisho Pharmaceutical Co., Ltd. - 199
Other current assets 127 615
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Total current assets 25,243 28,151
Property and equipment, net 127 157
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Total assets $ 25,370 $ 28,308
========================================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,145 $ 941
Accrued project costs and other 1,546 2,283
Payroll liabilities 237 358
Restructuring reserve 287 310
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Total current liabilities 3,215 3,892
Long-Term liabilities:
Restructuring reserve-long-term portion 907 968
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Total Liabilities 4,122 4,860
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Stockholders' equity:
Common stock 332 332
Additional capital 199,355 199,344
Accumulated deficit (178,439) (176,228)
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Net stockholders' equity 21,248 23,448
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Total liabilities and stockholders' equity $ 25,370 $ 28,308
========================================
See accompanying notes.
INSMED INCORPORATED
Condensed Consolidated Statements of Operations
(in thousands, except per share data - unaudited)
Three Months Ended
March 31,
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2003 2002
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Revenues $ 62 $ 102
Operating expenses:
Research and development 1,575 5,705
General and administrative 788 706
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Total operating expenses 2,363 6,411
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Operating loss (2,301) (6,309)
Interest income 92 202
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Net loss $ (2,209) $(6,107)
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Basic and diluted net loss per share $ (0.07) $ (0.19)
==================================
Shares used in computing basic and diluted net
loss per share 33,211 32,948
==================================
See accompanying notes.
Reconciliation of Q1 2003 Net loss to Q1 2003 cash absorbed
and burn rate. (Figures reported in $ thousands)
Net loss for Q1 2003 $ (2,209)
Depreciation 30
Reduction in working capital 8
Reduction in long-term liabilities (61)
Proceeds from issuance of stock 11
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Cash absorbed for Q1 2003 (2,221)
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Average monthly burn for Q1 2003 (740)
=================
See accompanying notes.
For more information, contact:
Baxter Phillips, III Haris Tajyar
Investor Relations Managing Partner
Insmed Incorporated Investor Relations International
Phone 804.565.3041 Phone 818.981.5300
bphillips@insmed.com htajyar@irintl.com
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