Why Insmed Incorporated Shares Spiked Higher

Insmed shares soar after delivering additional data on lead drug Arikayce at the American Thoracic Society's annual meeting. Find out what this news really means for investors.

May 20, 2014 at 2:31PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Insmed (NASDAQ:INSM), a clinical-stage biopharmaceutical company focused on developing inhaled therapies to treat lung diseases, rocketed higher by as much as 16% after announcing positive open label data from a mid-stage study involving lead experimental compound Arikayce for treatment-resistant nontuberculous mycobacterial (NTM) lung infections.

So what: According to Insmed's early afternoon release, which caused quite the spike in its share price and was presented via a poster at the American Thoracic Society's annual meeting in San Diego, Calif., of the 78 patients that agreed to receive once-daily Arikayce plus the standard care of treatment for an additional 84 days (following a previous 12 weeks of treatment), 21 of those patients were NTM-negative by day 168. As Insmed points out, 10 of these patients were culture negative at day 84, as well as five Arikayce patients and six placebo patients that switched to Arikayce during the open-label trial. Based on this data Insmed plans to discuss with the Food and Drug Administration its next development steps, although it applied for the breakthrough therapy designation last month.

Now what: Keep in mind that this is the same stock that tumbled just two months ago after reporting that Arikayce met a number of key secondary endpoints in a mid-stage study involving NTM lung infections, but that missed its primary endpoint due to a high p-value (a measure that determines how much chance rather the medication could have factored into the results). On one hand we're seeing a clearly positive trend toward more negative cultures in the Arikayce arm compared to the placebo. On the other, a higher number of adverse events than the placebo and missing its primary endpoint has to give investors cause for concern. I'm personally continuing to monitor Arikayce's development, but I'm doing it from the sidelines and would suggest investors do the same. There's no guarantee it receives breakthrough therapy status or that its secondary endpoints can carry it to an approval. It would be great for treatment-resistant NTM patients if it worked out and they received a new treatment option, but I'm still seeing too much conflicting data to put my support behind this mid-stage investigational drug as of yet.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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