3SOF

The following analysis was written on September 26th:

Quote from: sctrben on September 10, 2007, 07:19:05 PM
It's been a while since INSM was hit on before... INSMED has come a long way since those last discussions, all speculation of how the court case would go is now behind them. Test Phases are soon to be bringing new speculative excitement on several fronts, ROP, HARS, MMD, ALS, FOB... 

9 NEW positions, 15 INCREASED positions, and only 3 sold out is a complete turnaround in institutional sentiment...
http://www.nasdaq.com/asp/Holdings.asp?F...

1. Profile

Insmed Incorporated (INSM), a biopharmaceutical company, engages in the development and commercialization of drugs to treat metabolic diseases, endocrine disorders, and oncology. Its lead product candidate IPLEX, a recombinant protein product candidate, is in Phase II clinical trials for the treatment of myotonic muscular dystrophy, the common form of adult-onset muscular dystrophy. It is also conducting a Phase II clinical study for investigating IPLEX as a treatment for HIV associated adipose redistribution syndrome; a Phase I clinical study investigating IPLEX as a treatment for retinopathy of prematurity, a disease where the small blood vessels in the back of the eye and the retina grow abnormally; and an expanded access program in Italy to provide IPLEX to physicians for patients with amyotrophic lateral sclerosis, a neurodegenerative disease that affects nerve cells in the brain and the spinal cord. In addition, Insmed is developing INSM-18, a small molecule tyrosine kinase inhibitor that is under Phase I/II clinical trials for the treatment of breast, lung, pancreatic, and prostate tumors; and rhIGFBP-3, a Phase I clinical product candidate for the treatment of breast, prostate, liver, ovarian, and colon cancers. The company has license and collaborative agreements with Fujisawa Pharmaceutical Co., Ltd. to use IGF-I therapy for the treatment of extreme or severe insulin resistant diabetes; and a license to Pharmacia AB's portfolio of regulatory filings pertaining to rhIGF. Insmed was founded in 1999 and is headquartered in Richmond, Virginia.

2. Stock Price History



Before I begin let me start by saying that I dislike biotechnology stocks in general, and the reason for that is simple, I dislike them because most of them keep diluting shareholder's value. This happens because most biotechnolohy companies don't sell anything and have huge losses, so to survive they need a continuous flow of capital. They get this capital by issuing and selling new shares to investors. Every time a new share is printed existing shareholders see the value of their shares being diminished as they represent less of the company.

On this issue INSM looks like the champion of dilution, with the share count rising 122 fold since 1999. The company printed 21 million new shares just in the first half of 2007.

A second issue, as I look to INSM's profile, I see it has changed. When I first met this company and was still an ignorant on fundamental analysis (I guess that one year from now I'll consider I was an ignorant now), the company was developing IPLEX to cure children whom had a rare disease which made them abnormally small. I see IPLEX is being studied for other uses now.

I don't know enough to know the potential market for these other uses of the drug, or how long they are from being marketed. I just know that whatever rise the stock may have, it will be used to sell some more shares. This has been the history of this company and I don't see any change in the near or medium term future.

This isn't to say it is impossible for INSM to double or triple if there's some of those "bombastic" news releases which characterize biotech stocks. But will it be sustainable? I doubt it.

Anyway, I see sctrben made his analysis on the stock and likes it, so I just wish I'm wrong or incomplete, good luck

Hmm, I wrote some wise things at this latest analysis for INSM, especially the following part in bold

QuoteBefore I begin let me start by saying that I dislike biotechnology stocks in general, and the reason for that is simple, I dislike them because most of them keep diluting shareholder's value. This happens because most biotechnology companies don't sell anything and have huge losses, so to survive they need a continuous flow of capital. They get this capital by issuing and selling new shares to investors. Every time a new share is printed existing shareholders see the value of their shares being diminished as they represent less of the company.

QuoteOn this issue INSM looks like the champion of dilution, with the share count rising 122 fold since 1999. The company printed 21 million new shares just in the first half of 2007.

A second issue, as I look to INSM's profile, I see it has changed. When I first met this company and was still an ignorant on fundamental analysis (I guess that one year from now I'll consider I was an ignorant now), the company was developing IPLEX to cure children whom had a rare disease which made them abnormally small. I see IPLEX is being studied for other uses now.

QuoteI don't know enough to know the potential market for these other uses of the drug, or how long they are from being marketed. I just know that whatever rise the stock may have, it will be used to sell some more shares. This has been the history of this company and I don't see any change in the near or medium term future.

This isn't to say it is impossible for INSM to double or triple if there's some of those "bombastic" news releases which characterize biotech stocks. But will it be sustainable? I doubt it.

So, until there are bombastic news, INSM stays dead.