Insmed Announces Fourth Quarter and Full-Year 2009 Financial Results
RICHMOND, Va., March 15 /PRNewswire-FirstCall/ -- Insmed Inc. (Nasdaq: INSM), a biopharmaceutical company, today reported results for the fourth quarter and full-year ended December 31, 2009.
Revenues for the fourth quarter ended December 31, 2009 were $2.5 million, as compared to $2.9 million for the corresponding period in 2008. The decrease was a result of a reduction of $0.9 million in cost recovery from our IPLEX™ Expanded Access Program ("EAP") for Amyotrophic Lateral Sclerosis ("ALS") in Europe, which was partially offset by $0.5 million of IPLEX™ grant revenue that was recognized in the fourth quarter of 2009. The reduction in IPLEX™ cost recovery was due to the Company's decision in July 2009 to cease supplying IPLEX™ to new ALS patients in order to preserve the remaining IPLEX™ inventory for ALS patients currently receiving the drug. The $0.5 million in grant revenue relates to the timing of a grant received from the Muscular Dystrophy Association in regards to the previously completed Phase II Myotonic Muscular Dystrophy trial.
In the fourth quarter of 2009, the Company posted a net profit of $2.3 million, or $0.02 per share, as compared to a net loss of $4.0 million, or $0.03 per share, for the fourth quarter of 2008. The $6.3 million improvement was attributable to a $4.5 million decrease in total expenses, a $2.0 million reduction in taxes and a $0.2 million reduction in interest expense, which was partially offset by the $0.4 million reduction in total revenues.
The $4.5 million decrease in total expenses were driven largely by lower research and development expenses ("R&D Expenses") as a result of the elimination of manufacturing expenses following the sale of our follow-on biologics ("FOB") assets in March 2009. Selling, general and administrative expenses ("SG&A Expenses") were principally in line with the fourth quarter of 2008.
The $2.0 million reduction in taxes resulted from the beneficial impact of the revised tax laws, which came into effect in the fourth quarter of 2009, and allowed the Company to utilize more of its net operating losses ("NOLs") than previously able under former tax law to reduce the amount of taxes paid on the gain on sale of its FOB business to Merck in March 2009.
The lower interest expense was due to the reduction of the debt discount amortization associated with our 2005 convertible notes.
For the 12-months ended December 31, 2009, revenues totaled $10.4 million, as compared to $11.7 million in the 12-months of 2008. Consistent with fourth quarter results, the decrease was primarily attributable to a year-over-year decrease of $1.3 million in cost recovery from our IPLEX™ EAP in Europe.
Net income for the 12-months ended December 31, 2009 was $118.4 million, or $0.93 per share, compared to a net loss of $15.7 million, or $0.13 per share, for the corresponding 12-months of 2008. This $134.0 million improvement was primarily due to the $127.0 million after tax gain on sale of our FOB assets to Merck, combined with a $7.1 million decrease in total expenses, a $0.3 million improvement in investment returns, a $0.5 million decrease in interest expense, and a $0.5 million reduction in the realized loss on investments, which were partially offset by a $1.3 million reduction in net revenue.
The $7.1 million decrease in total expenses was due to an $11.8 million reduction in R&D expenses, which was partially offset by a $4.7 million increase in SG&A expenses.
The $11.8 million reduction in R&D expenses was due primarily to a decrease in manufacturing expenses following the sale of our FOB assets in March 2009. The $4.7 million increase in SG&A expenses was due largely to a combination of the recognition of stock compensation expense for the restricted stock and restricted stock units that vested on March 31, 2009, and the award of bonuses, together with the increased finance, legal and consulting fees related to the ongoing strategic review. The improved return on investments reflected the increased cash position, the lower interest expense was again due to the reduction in debt discount amortization and the $0.5 million reduction in investment loss was due to the write-off of the NAPO investment, which occurred in 2008.
"As we continue to move ahead with our strategic review, we were pleased with our ability to generate cash in the fourth quarter," said Dr. Melvin Sharoky, Insmed's Chairman. "We remain committed to protecting our capital for the full duration of the strategic review. We have an enviable balance sheet, especially considering that access to capital remains limited for many private and public biotech companies, and continue to be focused on leveraging our assets in order to drive maximum long-term shareholder value."
As of December 31, 2009, Insmed had total cash, cash equivalents, short-term investments, and certificate of deposits on hand totaling $124.3 million, consisting of $122.2 million in cash and short term investments and $2.1 million in a certificate of deposit, as compared to $2.4 million of cash on hand as of December 31, 2008. The $121.9 million increase in total cash was due to the $127.5 million in before tax proceeds from the sale of Insmed's FOB assets to Merck, $4.1 million from the conversion of warrants and options into common stock, the release of a $2.1 million previously restricted certificate of deposit, and a $0.4 million increase in unrealized gains on investments, which was partially offset by $11.0 million utilized to fund operations and $1.2 million for the partial repayment of the Company's 2005 convertible notes.
Conference Call
To participate in today's 8:30 AM ET conference call, please dial 866-543-6411 (U.S. callers) or 617-213-8900 (international), and provide passcode 41745811. A live webcast of the call will also be available at: http://phx.corporate-ir.net/playerlink.zhtml?c=122332&s=wm&e=2782413.
Please allow extra time prior to the webcast to register, download and install any necessary audio software.
The webcast will be archived for 30 days, and a telephone replay of the call will be available for seven days, beginning at 11:30 AM ET today at 888-286-8010 (U.S. callers) or 617-801-6888 (international), using passcode 80401187.
About Insmed
Insmed Inc. is a biopharmaceutical company with unique protein development experience and a proprietary protein platform aimed at niche markets with unmet medical needs. For more information, please visit http://www.insmed.com.
Forward-Looking Statements
This release 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 release, including statements relating to business strategies, plans and objectives of management and our strategic review process, 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. The risks and uncertainties include, without limitation, we may be unsuccessful in identifying or reaching agreement with acquisition or merger candidates 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, 2009. Readers are cautioned not to place undue reliance on any forward-looking statements which speak only as of the date of this release. 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.
INSMED INCORPORATED
Consolidated Balance Sheets
(in thousands, except share and per share data)
December 31, December 31,
2009 2008
----------- -----------
Assets
Current assets:
Cash and cash equivalents $12,740 $2,145
Short-term investments 109,441 252
Income tax receivable 2,023 -
Accounts receivable, net 245 122
Prepaid expenses 159 74
----------- -----------
Total current assets 124,608 2,593
Long-term assets:
Certificate of deposit 2,085 -
Restricted cash, long-term - 2,095
Deferred financing costs, net 2 70
----------- -----------
Total long-term assets 2,087 2,165
----------- -----------
Total assets $126,695 $4,758
=========== ===========
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable $312 $1,277
Accrued project costs & other 1,150 936
Payroll liabilities 580 453
Restricted stock unit liability - 113
Interest payable 1 13
Deferred rent 132 168
Deferred revenue 398 302
Convertible debt 231 2,211
Debt discount (23) (596)
----------- -----------
Net convertible debt 208 1,615
----------- -----------
Total current liabilities 2,781 4,877
Long-term liabilities:
Convertible debt - 553
Debt discount - (66)
----------- -----------
Net long-term convertible debt - 487
Asset retirement obligation - 2,217
----------- -----------
Total liabilities 2,781 7,581
----------- -----------
Stockholders' equity (deficit):
Common stock; $.01 par value; authorized
shares 500,000,000; issued and outstanding
shares, 130,208,099 in 2009 and 122,494,010
in 2008 1,302 1,225
Additional paid-in capital 350,243 342,378
Accumulated deficit (228,076) (346,426)
Accumulated other comprehensive gain:
Unrealized gain on investment 445 -
----------- -----------
Net stockholders' equity (deficit) 123,914 (2,823)
----------- -----------
Total liabilities and stockholders'
equity (deficit) $126,695 $4,758
=========== ===========
INSMED INCORPORATED
Consolidated Statements of Operations
(in thousands, except per share data)
Twelve Months Ended
December 31,
2009 2008 2007
-------- -------- --------
Sales, net $- $- $423
Royalties 129 144 121
License income - - 1,607
Grant revenue 1,044 1,044 -
Other expanded access program
income, net 9,200 10,511 5,430
-------- -------- --------
Total revenues 10,373 11,699 7,581
Operating expenses:
Cost of goods sold - - 576
Research and development 9,207 21,047 19,198
Selling, general and administrative 9,840 5,063 8,246
-------- -------- --------
Total expenses 19,047 26,110 28,020
-------- -------- --------
Operating loss (8,674) (14,411) (20,439)
Investment income 808 500 1,159
Realized loss on investments - (500) -
Interest expense (781) (1,256) (682)
Gain on sale of asset, net 127,474 - -
-------- -------- --------
Income (loss) before taxes 118,827 (15,667) (19,962)
Income tax expense 477 - -
-------- -------- --------
Net income (loss) $118,350 $(15,667) $(19,962)
======== ======== ========
Basic net income (loss) per share $0.93 $(0.13) $(0.17)
======== ======== ========
Shares used in computing basic net
income (loss)
per share 127,115 122,132 114,682
======== ======== ========
Diluted net income (loss) per share $0.93 $(0.13) $(0.17)
======== ======== ========
Shares used in computing diluted
net income (loss)
per share 127,270 122,132 114,682
======== ======== ========
INSMED INCORPORATED
Consolidated Statements of Cash Flows
(in thousands)
Twelve Months Ended
December 31,
2009 2008 2007
-------- -------- --------
Operating activities
Net income (loss) $118,350 $(15,667) $(19,962)
Adjustments to reconcile net income
(loss) to net cash
used in operating activities:
Depreciation and amortization 707 1,043 406
Stock based compensation expense 2,542 850 521
Gain on sale of asset, net (127,474) - -
Stock options issued for services - 143 38
Realized loss on investments - 500 -
Changes in operating assets and
liabilities:
Income tax receivable (2,023) - -
Accounts receivable (123) 128 (9)
Inventory - - 576
Prepaid expenses (85) 170 (157)
Accounts payable (965) 373 (6,282)
Accrued project costs & other 214 433 (612)
Payroll liabilities 127 (178) (671)
Deferred rent (36) 53 61
Deferred revenue 96 57 245
Restricted stock unit liability (113) 113 -
Asset retirement obligation (2,217) - 591
Interest payable (12) (10) -
-------- -------- --------
Net cash used in operating activities (11,012) (11,992) (25,255)
-------- -------- --------
Investing activities
Cash received from asset sale 127,474 - -
Change in certificate of deposits 10 - -
Decreases in short-term
investments - 12,673 9,066
Purchases of short-term
investments (108,744) - (500)
-------- -------- --------
Net cash provided by investing
activities 18,740 12,673 8,566
-------- -------- --------
Financing activities
Proceeds from issuance of common
stock 580 - 16,964
Repayment of convertible notes (1,246) (2,211) -
Warrants converted into shares 3,491 - -
Other 42 121 1,158
-------- -------- --------
Net cash provided by (used in)
financing activities 2,867 (2,090) 18,122
-------- -------- --------
Increase (decrease) in cash and cash
equivalents 10,595 (1,409) 1,433
Cash and cash equivalents at
beginning of period 2,145 3,554 2,121
-------- -------- --------
Cash and cash equivalents at end of
period $12,740 $2,145 $3,554
======== ======== ========
Investor Relations Contact: |
|
Brian Ritchie - FD |
|
212-850-5683 |
|
Media Relations Contact: |
|
Irma Gomez-Dib - FD |
|
212-850-5761 |
|
SOURCE Insmed Incorporated
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