Please ensure Javascript is enabled for purposes of website accessibility

Why Insmed Stock Is Soaring Again

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Insmed Incorporated Stock Quote
Insmed Incorporated
$20.89 (5.93%) $1.17

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.