Insmed (INSM) Misses Q4 EPS by 1c, Revenues Beat; Provides FY20 Sales Guidance

(Updated - February 25, 2020 8:09 AM EST)

(Update corrects headline to note revenue beat consensus)

Insmed (NASDAQ: INSM) reported Q4 EPS of ($0.59), $0.01 worse than the analyst estimate of ($0.58). Revenue for the quarter came in at $45.7 million versus the consensus estimate of $44.7 million.

Fourth Quarter and Full-Year 2019 Financial Results

• Total revenue for the fourth quarter ended December 31, 2019 was $45.7 million, comprising U.S. net sales of $44.3 million and ex-U.S. net sales of $1.4 million. Total revenue for the full year 2019 was $136.5 million, comprising U.S. net sales of $132.1 million and ex-U.S. net sales of $4.4 million. This compares to total revenue of $9.8 million for the fourth quarter and full year 2018.
• Cost of product revenues (excluding amortization of intangible assets) was $8.7 million for the fourth quarter of 2019, compared to $2.4 million for the fourth quarter of 2018. For the full year 2019, cost of product revenues was $24.2 million compared to $2.4 million in 2018. The increase in cost of product revenues is attributable to the increase in revenues.
• R&D expenses were $32.6 million for the fourth quarter of 2019, compared to $39.9 million for the fourth quarter of 2018. For the full year 2019, R&D expenses were $131.7 million compared to $145.3 million in 2018. The decrease in R&D is primarily due to the Company capitalizing inventory subsequent to the September 2018 U.S. Food and Drug Administration (FDA) approval of ARIKAYCE and capitalizing certain costs related to the investment in our long-term production capacity at Patheon in 2019.
• Selling, general and administrative (SG&A) expenses for the fourth quarter of 2019 were $50.2 million, compared to $54.0 million for the fourth quarter of 2018. For the full year 2019, SG&A expenses were $210.8 million, compared to $168.2 million in 2018. The decrease in SG&A in the fourth quarter is primarily due to a decrease in external expenses related to ARIKAYCE. The increase in SG&A for the full year is primarily due to an increase in external expenses related to ARIKAYCE and a milestone owed in connection with amended agreements with the Cystic Fibrosis Foundation Therapeutics, Inc. (CFFT).
• For the fourth quarter of 2019, Insmed reported a GAAP net loss of $53.0 million, or $0.59 per share, compared to a GAAP net loss of $91.6 million, or $1.19 per share, for the fourth quarter of 2018. For the full year 2019, Insmed reported a GAAP net loss of $254.3 million, or $3.01 per share, compared to a GAAP net loss of $324.3 million, or $4.22 per share, in 2018.

"2019 was a transformative year for Insmed as we evolved into a commercial-stage organization and advanced our global infrastructure. I am incredibly proud of our team's performance in the first full year of the ARIKAYCE U.S. launch, and we look forward to serving even more patients with the same level of dedication as we prepare for a potential approval and commercial launch in Europe and regulatory filings in Japan," commented Will Lewis, Chairman and Chief Executive Officer of Insmed. "With our recent announcement of positive top-line Phase 2 data for INS1007 in non-cystic fibrosis bronchiectasis, in addition to other meaningful advancements in our pipeline, we are well on our way toward building a robust portfolio of therapies that address the unmet needs of small patient populations experiencing big health problems."

GUIDANCE:

Insmed sees FY2020 revenue of $180-220 million, versus the consensus of $219.06 million.

• As of December 31, 2019, Insmed had cash and cash equivalents of $487.4 million. The Company's total operating expenses for the fourth quarter of 2019 were $84.1 million and for the full year of 2019 were $347.5 million. Adjusted operating expenses, as defined below, for the fourth quarter of 2019 were $75.0 million and for the full year 2019 were $300.1 million.
• The Company expects full-year 2020 revenues for ARIKAYCE to be in the range of $180 million to $220 million.
• As a result of these activities, Insmed expects adjusted operating expenses to be in the range of $340 million to $360 million for 2020.

For earnings history and earnings-related data on Insmed (INSM) click here.

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