UBS downgraded Insmed (NASDAQ: INSM) from Buy to Neutral with a price target of $18.00 (from $35.00) based on a SOTP as Arikayce becomes a 2017 story.

Analyst Matthew Roden commented, "Insmed reported 3Q results and an incrementally negative update to the enrollment progress for the Arikayce global ph3 CONVERT study in NTM. Full enrollment was targeted for YE15e, but the new guidance pushes that estimate back by 6-12 months, which takes key 2016 catalysts off the table and dampens the 2016-18 revenue streams. As a result, we have downgraded to Neutral with a PT of $18 by SOTP. The EU launch remains on track with an expected NTM launch in mid-2016, but due to country-by-country reimbursement, we don’t expect a ramp in revenue until 2017. We remain positive on Arikayce in NTM as we believe the data thus far support approvals and commercial uptake, but in the near term, we see more promising opportunities elsewhere in clinical-stage biotech, including PRTA, PBYI, and CNCE."

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Shares of Insmed closed at $17.09 yesterday.