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Insmed Incorporated (INSM - Snapshot Report) recently announced the pricing of its underwritten public offerings of its common stock. The company is looking to issue 6 million shares of its common stock at $10.40 per share. The company expects to raise $62.4 million (gross) through the offering. After deducting underwriting discounts and commissions, and other expenses to be paid by Insmed, the net proceed is expected to be around $58 million. Jul 22, 2013, is the tentative date for the closure of the offer.

The underwriters have been granted an option to purchase an additional 0.9 million shares of Insmed’s common stock, with a 30-day window to do so.

Net proceeds from the offering will be used by the company to advance the development of its lead candidate, Arikace, which includes funding efforts for regulatory approvals and commercialization. Insmed also intends to use the net proceeds to ensure adequate supply of Arikace before its launch.

We note that in Apr, 2013, the US Food and Drug Administration rendered orphan drug designation to Arikace for the treatment of infections caused by non-tuberculous mycobacteria (NTM). Insmed is also looking for orphan drug designation of the candidate in the EU.

Insmed is currently conducting a phase II study on Arikace in patients suffering from NTM lung infection. Insmed expects to report top-line results from the study by the end of this year. The company also plans to initiate a limited compassionate use program on the candidate shortly.

On approval, Insmed plans to market the candidate in the US and then in EU and Canada. If cleared by the regulatory bodies, Arikace would be the first approved inhaled antibiotic treatment for NTM lung infections.

Moreover, Arikace is also under phase III development for the treatment of pseudomonas aeruginosa lung infections in patients suffering from cystic fibrosis (CF). Insmed expects results from the study soon. Arikace enjoys orphan drug designation for this indication both in the US and the EU. The company is currently enrolling patients for a two-year open-label extension study on Arikace for the same indication. The extension study is expected to be completed within Jun 30, 2015.

In Jul 2013, Insmed reported encouraging results from a phase III study on Arikace for the treatment of CF, when compared to Novartis’ (NVS - Analyst Report) TOBI (tobramycin inhalation solution).

Insmed currently carries a Zacks Rank #4 (Sell). Stocks in the biopharma space, which appear to be more attractive, include Jazz Pharmaceuticals Public Limited Company (JAZZ - Analyst Report) and Medivation, Inc. (MDVN - Analyst Report), both with a Zacks Rank #1 (Strong Buy).

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