Insmed Inc INSM
Compounding R&D moat: scientific discovery in underserved rare diseases earns temporary monopoly returns that fund the next generation of cures.
Optionality holds this up; Valuation is the soft spot.
| Moat | 4.0 |
| Management | 7.0 |
| Valuation | 3.0 |
| Risk · 10 = lowest | 5.0 |
| Business model | 7.0 |
| Optionality | 8.0 |
The price needs 34.8% growth a year for ten years. The AI thinks 20.0% is achievable, at a 24.8% margin.
Insmed looks roughly fairly priced: the market already pays for a very successful launch of its new lung drug BRINSUPRI and a decent chance that its inhaled pulmonary hypertension drug TPIP works. Revenue grew from $142M to $524M per quarter in a year, and losses are shrinking quickly as sales outrun costs. Management sees $14B+ of combined peak sales, but even haircutting that, the stock price assumes most of it happens. The main risk is a binary one: TPIP trials failing or BRINSUPRI demand plateauing once the initial patient backlog is treated would leave a rich valuation exposed.
Insmed Incorporated develops and commercializes therapies for patients with serious and rare diseases in the United States, Europe, Japan, and internationally. The company offers ARIKAYCE for the treatment of refractory nontuberculous mycobacterial lung infections, as well as is in phase 3 clinical trial for the treatment of mycobacterium avium complex lung disease as part of a combination antibacterial drug regimen for adult patients. It also develops brensocatib, an oral reversible inhibitor of dipeptidyl peptidase 1(DPP1) that is in phase 3 clinical trial for the treatment of bronchiectasis; and in phase 2 clinical trial for the treatment of chronic rhinosinusitis without nasal polyps and hidradenitis suppurativa. In addition, the company is developing treprostinil palmitil inhalation powder, an inhaled formulation of a treprostinil prodrug treprostinil palmitil, which is in phase 3 clinical trial for the treatment of pulmonary hypertension associated with interstitial lung disease; and phase 2 clinical trial for the treatment of pulmonary arterial hypertension. Further, it develops INS1201, a microdystrophin adeno-associated virus gene replacement therapy which is in phase 1 clinical trial for the treatment of Duchenne muscular dystrophy, as well as it is also developing pre-clinical research programs for gene therapy, AI-driven protein engineering, protein manufacturing, RNA end-joining, and synthetic rescue. In addition, it provides INS1148, monoclonal antibody targeting stem cell factor called SCF248 that is in phase-2 clinical trial for the treatment of interstitial lung disease, and asthma; and INS1202, an intrathecally delivered gene therapy which is in phase 1 of clinical trial for the treatment of amyotrophic lateral sclerosis. The company was founded in 1988 and is headquartered in Bridgewater, New Jersey.
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