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Why Insmed Stock Is Soaring Again

By Brian Feroldi - Feb 4, 2020 at 2:22PM

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Shares jump in response to a pair of analyst upgrades.

What happened

Investors in Insmed (INSM 5.93%), a commercial-stage biotech focused on rare diseases, are having another good day. Traders are bidding up the stock 11% as of 2:47 p.m. EST on Tuesday, after the company received price-target boosts from two influential financial institutions.

So what

On Monday, Insmed announced top-line data from its phase 2 Willow trial, which was testing a compound called INS1007 as a hopeful treatment for non-cystic fibrosis bronchiectasis (NCFBE). The compound met both its primary and secondary endpoints in the trial, and management has decided to move the drug into phase 3.

That upbeat news caused analysts at Morgan Stanley to raise their price target on the stock to $50, up from $37. The analysts also maintained their overweight rating.

Insmed received some praise from research analysts at Goldman Sachs as well. Goldman raised its price target to $46 (up from $33) and gave the stock a buy rating.

Three traders pointing at a computer screen and smiling

Image source: Getty Images.

Both of these price targets are significantly higher than Insmed's closing price of $28.88 from Monday's trading session, so it's understandable that shares are soaring in response.

Now what

Some analysts believe that if it can find its way to market, INS1007 could ultimately generate more than $1 billion in peak sales. However, it will still be some time before we know whether INS1007 can continue to produce strong clinical results in a more robust phase 3 trial. For that reason, I'll remain cautious about Insmed stock.

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