3SOF

Quote from: wisebuys on January 29, 2006, 10:19:04 PM
They don't have any interest to convert at prices below $1.70. And insiders also exercised options at $1.43 just before iPlex was FDA approved.

Hi David.  Please tell me the $1.70 should be $2.70 and I'll sleep better tonight.

Have a GRRRRRREAT DAY !!!!!

The way to sleep better is to hold about 10 different stocks, instead of just 1 or 2 

Quote from: berloga on January 29, 2006, 11:10:28 PM

Hi David,

Thank you for the detailed analysis. Perhaps I am being somewhat naive, but here is what I see: you short sell REDF (they got $600M in market cap and $14.5M in sales) and yet you hold long INSM (their cap is $160M and projected revenue is ~$8M). The ratios are very small if one takes revenue/cap. And now we see the bond holders pull back from INSM, why? If the future is bright, can they wait the 3 months and cash out then (together with us!)?
Cheers.

The difference between REDF and INSM is that revenue growth at REDF is 44% where revenue growth at INSM is at least 6000%.

I think bondholders don't care much about future prospects, because that involves risk. If they can get nice profits for sure, they'll take them. Bond investors don't like risk, that's why they're bond investors, not stock investors.

Quote from: brandyjoco on January 29, 2006, 11:47:49 PM
Why is their projected revenue only 8million? Is that for this quarter only? The drug that got FDA approved is for a possible $400 million sales market - isn't it? Of course, they will share the market with TRCA.

There's only one analyst covering INSM and he projects 2006 revenue at $7.84 million, I don't know why. Probably that's because INSM will take some time to commercialize iPlex and 2006 will only see a couple of months of sales.

But you're right, the potential market for iPlex is $400M and they have only one competitor (it seems INSM's treatment has some advantages over TRCA's), so over the long run (perhaps in 2007 or 2008) we may have $200 or $300M in revenues at INSM.

The biotech industry has an average 19.76 P/S ratio, if we apply this to INSM we could have something like $4B in market cap, or 20 times more than what it is now 

But we need patience ... after I get some more details at next conference call I may consider INSM for the Long Term on Fire Portfolio.

Seems to be trending down.

Still a hold...long term but not short term?

Thanks...Jody

Quote from: 422fwhp on January 30, 2006, 07:31:47 AM
Seems to be trending down.

Still a hold...long term but not short term?

Thanks...Jody

The update is on the previous page Jody, there I say, among other things, the following:

QuoteIn sum, I think the current weakness on INSM shares is due to bond holders converting notes and warrants into common shares and selling them in the open market for a superior profit. If the price goes down from current levels they will stop converting and there won't be so much selling pressure. The market still needs to absorb about 22.7 million shares before these guys are out of the way.

This can be done in a few days if we get positive follow through at next conference call.

I believe INSM has some problems from the past (some litigation issues also), but the future is bright. The company has never been so close to profitability as it is now. Analysts expect 2006 revenues of $7.84M against $130K in 2005.

I think we'll see $4.28 before the second quarter ends and I'll take profits around that level.

So, I'll continue holding 

As I see it, INSM is short term weak because of note holders converting into common shares and selling them in the open market for a superior profit. If their profit is no longer superior when compared with the interest they will receive on the notes, they will stop converting and stop selling common shares.

In the meantime, future prospects at the company are bright. They have a drug, iPlex, approved for commercialization, more effective than it's lonesome competitor's drug.

When note holders are out of the way and the company expresses more details about the commercialization process to start in the second quarter of 2006, the stock will rise to values above $4.

I'm willing to allow it fluctuate over the short term so I collect a big gain a few months from now.  I will bear the risk.

Nice candle on INSM yesterday  I see the stock consolidating around current levels (maybe push higher some more) for some time, as note holders are absorbed by the market (probably they won't sell everything they have now, that would not be smart from them - if I know the type, I would say they will convert and sell about half of the notes at this time).

Then INSM will push to new highs, I don't know what price, when we get more information about the commercialization process and details on price, size of the market, etc.

By the way, people talk of a market for iPlex between $200 and $400 million per year. Anybody knows from where do these estimates come from?

I'll work on this, the potential size of the market for iPlex, on the update. In the meantime, I'll continue holding this promising biotech stock.

I spent nearly an hour this afternoon to try and find this article I read sometime ago about iplex and insm.  To this end I must say I failed and was not able to find it.  Anyways the article was something I stumbled upon while reading the Yahoo message board and following various links.  I`m hoping somebody else might have read this article and might have saved it.  The article mentioned that insm is in litigation because of it's marketing practice with regards to iplex which is a drug to treat a musclular degeneration condition of which there are only around 80,000 people in the US who are affected by it. In anycase if that is true the market for the drug is quite limited.  DISCLAIMER:  I have sold my small position in insm on the same day I recommend the same action and posted to the board.

Hey David, NetFish and others, this might be what you refer to I haven't had time to consider how/if this impacts potential revenue from the drug relative to current INSM revenues:

IPLEX summary: The targeted treatment indication for iPlex is Primary IGFD which encompasses a variety of genetic and acquired conditions in which the action of growth hormone (GH) is absent or attenuated resulting in low serum levels of IGF-I

Source: http://www.drugs.com/iplex.html

Primary IGFD Study: The study, known as Sub-study 6 of the National Cooperative Growth Study, found that among IGF-1 deficient short stature patients, non-growth hormone deficient Primary IGFD was approximately as frequent as growth hormone deficiency itself. This relative prevalence suggests that approximately 30,000 children in the United States have short stature due to non-growth hormone deficiency, Primary IGFD. It also suggests that approximately one-third to one-half of idiopathic short stature children can be re-classified as Primary IGFD.

Source: http://www.medicalnewstoday.com/medicalnews.php?newsid=24493

Found a site that has some good info on insm.... http://www.investorshub.com/boards/board.asp?board_id=1433

I have got my shares so let the waiting game start! It might take 1 week, 1 month or 1 year but Insmed is worth a lot more than 2.32 

The approval of Iplex for Severe Primary IGFD can justify a share price of at least $4 but the approval clears the road for the other indications where Iplex has shown significant efficiency:

• Extreme Insulin Resistance
• HIV Lipodystrophy
• Myotonic Dystrophy
• Expand Short Stature

Insmed is in phase II or III trials for these indications.

The rest of the pipeline is interesting as well but Insmed has turned a corner and it is the immediate commercial perspectives that make this yet another excellent 3SOF pick.

Mike

I have been watching this thread with interest ever since David bought into INSM.  Unfortunately, or I guess fortunately now , I had no free money to put into it at that time so just watched from the sidelines.  I have some free cash now (woo hoo) and think that INSM is ready for a run again.  As the chart shows, INSM has been in a bull pennant (continuation pattern) since it's run up to the middle of last month.  This is a strongly confimed formation with 4 hits on both the top and the bottom of the pennant.

A few things lead me to believe that this is ready to move again:
1.  The bull pennant is getting to the point where the end of the flag is closing - meaning that the stock will have to either breakout above or below the pattern.
2.  The pennant has intersected with TL1 which should prove to be another element of support to help the stock break out to the upside.
3.  All of this is happening on generally lower and lower volume which is a good thing as a stock moves through a continuation pattern.

I will be looking to buy in around $2.25 tomorrow.

David,

I really think that this should go in the 3sof long portfolio.  You added a couple on the way up in gigm and diet, and I think adding one on the way down that clearly has some true long term potential as Michael stated would make some sense.  JMHO

fyi:
INSM: Short Interest DN 23.7% to 4.0M in Jan 2006
Wednesday, January 25, 2006 16:20 ET

According to new short interest data from NASDAQ, short interest for Insmed Incorporated (NasdaqNM: INSM) DECREASED 23.7% to 4,017,752 shares for the month ended mid-January, 2006.

SYMBOL      DECEMBER      JANUARY          CHANGE       %CHANGE     DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
INSM           5,269,048       4,017,752      -1,251,296       -23.75%           2

Based on INSM's 20-day average daily share volume of 3,515,880, it would require approximately 2 day(s) of buying to cover this short interest.

Great information and analysis on this thread, thanks a lot 

There are some conflicts, netfishmademerich says the market for iPlex is potentially just 30,000 children, but Michael talks about other applications for iPlex which are very interesting. Aussietrader and jlong gave us great links with information on INSM, basonista made an informative (and correct, in my view) technical analysis. Finally oicpecnoc said INSM should be a long term investment, not just a trade and la-onda posted short interest on the stock, which is declining (I'm finding that short interest in stocks is quite a different thing than in the futures market - in the futures markets, the more shorts the better (for longs), in stocks it's not like that, since there are so many stocks, it looks like if there are a lot of people long or short a stock, they will just spread their point of view and eventually make it go their way  )

When I first look at INSM, I have to be honest, I thought the drug could eventually be used to treat children that don't grow as much as they "should". Every small children (say, small being 10 or 20% less than the average height of kids with the same age) could take the medicine. The market would be huge, then. But, now it seems the drug was approved just for Severe Primary IGFD, whatever that means ... but, if I read Michael's comments correctly, he says: «Expand Short Stature». Does this mean the drug can be approved, in the future, for this application?

As I read it, iPlex is just for children which are expected to be just 1.10 - 1.40m tall when they reach 18 years old, right? But, can't it be used to expand stature from, say, expected 1.60 to 1.75m?

If there is a strong chance that iPlex can, in the future, be used to increase stature expectations, the market for the drug would be immense and I would buy it with a long term perspective.

Let us study some more ... again, thanks for the great info 

In the meantime, technically INSM just touched TL1 and yet it closed at support of $2.37. I guess the stock goes higher from here, I'll continue holding it anyway.

News of a future $75 million shelf by INSM:

They have about $20 cash or more now - are they trying to gear up to manufacture the drug that they need in the second quarter?

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060203:MTFH64534_2006-02-03_22-44-58_WNA0849&symbol=INSM.O

Randolph & members,
How will this news reflect on INSM pps on Monday? Could we expect big sell off at market open or even in pre market? It seems that after hours pps already declined. What is the best course of action?
Thank you