Why Insmed Incorporated Shares Spiked Higher

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.

Insmed may have soared today, but it'll likely struggle to keep pace with this top stock over the long run 
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2965263, ~/Articles/ArticleHandler.aspx, 9/1/2015 8:22:21 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated 11 hours ago Sponsored by:
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASD 4,776.51 -51.82 -1.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/31/2015 3:59 PM
INSM $24.44 Down -1.25 -4.87%
INSMED, INC. CAPS Rating: ***