(Adds details from conference call, analysts' comments; updates
By Vrinda Manocha
March 26 Insmed Inc's shares plunged
after its experimental drug to treat a form of bacterial lung
infection failed the main goal of a trial, but the stock clawed
back much of its early losses after analysts said positive
secondary data was more relevant.
Insmed's shares were down 12 percent in afternoon trading,
recovering from a 34 percent plunge in premarket trading.
The company said the inhaled antibiotic, Arikayce, failed to
reduce bacterial density, a measure of change in infection,
significantly enough in patients with treatment-resistant
nontuberculous mycobacterial(NTM) lung infections.
But the sputum cultures of 11 of the 44 patients given the
drug did not show bacteria, meeting the mid-stage trial's
secondary goal of culture conversion, Insmed said.
Analysts said the secondary data was a more relevant measure
of the drug's efficacy and would be more meaningful to the U.S.
Food and Drug Administration and doctors.
"What today's news does is eliminate any debate about the
clinical meaningfulness of the data," said Andrew Fein, an
analyst with HC Wainwright & Co.
"The initial belief was, given the short duration of the
study, that showing culture conversion would be impossible."
The culture conversions were seen even after the study was
extended beyond its scheduled 84 days, said Renu Gupta, Insmed's
chief medical officer.
NTM lung infections are caused by a type of bacteria found
in soil as well as water and are characterized by cough, fever
and blood in the mucus. There is no approved treatment for these
Fein estimated Arikayce, if approved, could generate sales
of about $500 million by 2025 in the United States alone.
Insmed gave patients Arikayce along with a standard
treatment in the trial and compared the results with patients
given a placebo and the standard treatment.
Patients treated with Arikayce experienced a greater number
of adverse events, including throat irritation, than those given
the placebo, Insmed said.
The company, however, added that the adverse events were
consistent with those seen in patients receiving inhaled
Insmed's shares were down 12 percent at $16.06 in afternoon
trading. More than 6 million shares changed hands, putting the
stock among the most heavily traded on the Nasdaq on Wednesday.
The stock hit a low of $12.00 in premarket trading.
(Editing by Savio D'Souza)