Stifel analyst Stephen Willey reiterated a Buy rating and $208.00 price target on Insmed (NASDAQ: INSM)

The analyst commented, "UTHR’s TETON-1 trial meets primary endpoint – removing what we believe was perceived to be an incremental overhang for INSM shares. This morning (March 30), UTHR announced the P3 TETON-1 trial evaluating nebulized Tyvaso for the treatment of IPF met its primary endpoint with high statistical significance in demonstrating a superior change in absolute forced vital capacity (FVC) vs. placebo (130mL; p<0.0001) from baseline to Week 52 – representing an even larger placebo-adjusted effect size on FVC relative to what was previously reported in TETON-2 (96mL; p<0.0001). Similar to TETON-2 results, TETON-1 also achieved statistical significance (vs. placebo) on the key secondary endpoint of demonstrating a Tyvaso-mediated reduction in risk of clinical worsening – while numerical improvements were observed in other TETON-1 secondary endpoints including time to first acute exacerbation of IPF, change in percent predicted FVC, King’s Brief ILD QoL (K-BILD), and diffusion capacity of lungs for carbon monoxide (DLCO). Of note, these Tyvaso-mediated improvements on key secondary endpoints (% predicted FVC, K-BILD, DLCO) reached statistical significance in TETON-2. These benefits on TETON-1 primary/secondary endpoints were observed across all subgroups and were agnostic to background therapy use – while safety was reportedly consistent and no new signals were observed. Integrated analyses of pooled TETON-2/1 results demonstrate a 112mL Tyvaso-mediated improvement (vs. placebo) in Week 52 absolute FVC (p<0.0001) and statistical significance across most of the aforementioned secondary endpoints. Notably, pooled overall survival data at Week 52 trended in favor of Tyvaso but did not achieve statistical significance – which we believe represents a potential opportunity for TPIP to demonstrate efficacy differentiation. Given INSM’s planned pursuit of a registrational P3 trial(s) evaluating TPIP in IPF, these TETON-1 data unambiguously confirm the utilization of treprostinil in this disease setting and should meaningfully derisk the perception of P3 clinical development risk. We note UTHR has secured FDA-granted Orphan Drug Designation (ODD) for Tyvaso for the treatment of IPF and INSM’s ability to demonstrate TPIP yields superiority on either efficacy, safety, or impact on patient care (QD dosing should greatly facilitate the latter) will be important for establishing future freedom-to-operate."

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Shares of Insmed closed at $145.30 yesterday.