Insmed shares double as lung drug data convince Wall Street

New Jersey-based drugmaker Insmed gained more than $3 billion in market value Tuesday after reporting clinical trial results for an experimental lung disease drug that impressed analysts.

Data from the trial, a Phase 3 study called Aspen, showed that Insmed’s drug can significantly ease the coughing and shortness of breath that people with bronchiectasis frequently experience. Compared to a placebo, treatment reduced the annualized rate of these so-called pulmonary exacerbations by one-fifth, while also keeping them at bay for longer.

Notably, the drug, brensocatib, wasn’t associated with substantially more side effects than placebo. Rates of common adverse events like cold, cough and headache were similar between the drug and placebo arms, as were other “events of special interest” like infection and pneumonia.

Insmed plans to submit an approval application for brensocatib to the Food and Drug Administration by the end of this year, and expects it could launch the drug in the U.S. by mid-2025. It also intends to seek regulatory approvals in Europe and Japan.

Cystic fibrosis is a common cause of bronchiectasis, which refers to the dilation, infection and inflammation of bronchi in the lungs. But the condition can also have other roots, and it’s this group that Insmed is targeting with brensocatib. According to the company, roughly 450,000 people in the U.S. have bronchiectasis not caused by cystic fibrosis, with another 550,000 in Europe and Japan.

Unlike cystic fibrosis, for which there are several very effective drugs, there are no therapies in those regions that are specifically approved to treat bronchiectasis linked to other causes.

Insmed’s trial enrolled some 1,700 adults and adolescents across 35 countries. Participants were randomized to receive one of two doses of brensocatib or placebo once daily for one year.

Results showed that a 10 milligram dose of brensocatib reduced the annualized rate of pulmonary exacerbations by 21.1% versus placebo, while a 25 milligram dose led to a 19.4% reduction. Both findings were statistically significant, Insmed said.

The data on secondary endpoints were more mixed, with some results not meeting the statistical threshold for success. But both doses led to significant prolongation in the time to first pulmonary exacerbation and increased the odds of participants remaining exacerbation-free over 52 weeks.

The study’s success provides a substantial boost to Insmed’s position, analysts said. “The positive outcome should provide a huge sigh of relief for investors … as we believe it helps to secure a more positive outlook on the company’s future,” wrote Mizuho Securities’ Graig Suvannavejh in a client note Tuesday.

Analysts were also bullish on the market for brensocatib, should it win approval. According to Stephen Willey, an analyst at Stifel, the positive data could position Insmed to become a rare small-to-medium sized biotech with a path toward $5 billion or more in peak annual revenues.

Joseph Schwartz, an analyst at Leerink Partners, was similarly exuberant about brenoscatib’s potential, comparing in an investor note the drug’s opportunity to that of Dupixent and Humira, two of the most successful pharmaceutical products of all time.

Insmed is studying brensocatib in other inflammatory diseases driven by a type of white blood cell called a neutrophil, including chronic rhinosinusitis without nasal polyps and hidradenitis suppurativa.

Shares in the company rose by more than 112% Tuesday morning to trade at around $47 apiece.

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