insm-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-30739

INSMED INCORPORATED

(Exact name of registrant as specified in its charter)


Virginia						54-1972729
(State or other jurisdiction of incorporation or organization)						(I.R.S. employer identification no.)

700 US Highway 202/206,
Bridgewater, New Jersey						08807
(Address of principal executive offices)						(Zip Code)

(908) 977-9900

(Registrant’s telephone number including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section12(b) of the Act:


Title of each class	Trading symbols	Name of each exchange on which registered
Common stock, par value $0.01 per share	INSM	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer x						Accelerated filer o

Non-accelerated filer o						Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of May 2, 2022, there were 119,517,209 shares of the registrant’s common stock outstanding.

Table of Contents

INSMED INCORPORATED

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2022

INDEX


PART I. FINANCIAL INFORMATION

ITEM 1	Consolidated Financial Statements

	Consolidated Balance Sheets as of March 31 , 202 2 (unaudited) and December 31, 202 1	3

	Consolidated Statements of Comprehensive Loss (unaudited) for the three months ended March 3 1 , 202 2 and 202 1	4

	Consolidated Statements of Shareholders' Equity (unaudited) for the three months ended March 3 1 , 202 2 and 202 1	5

	Consolidated Statements of Cash Flows (unaudited) for the three months ended March 3 1 , 202 2 and 202 1	6

	Notes to Consolidated Financial Statements (unaudited)	7

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
ITEM 3	Quantitative and Qualitative Disclosures about Market Risk	35
ITEM 4	Controls and Procedures	35

PART II. OTHER INFORMATION

ITEM 1	Legal Proceedings	36
ITEM 1A	Risk Factors	36
ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	36
ITEM 5	Other Information	36
ITEM 6	Exhibits	37

SIGNATURE		38

Unless the context otherwise indicates, references in this Form 10-Q to “Insmed Incorporated” refers to Insmed Incorporated, a Virginia corporation, and “Company,” “Insmed,” “we,” “us” and “our” refer to Insmed Incorporated together with its consolidated subsidiaries. INSMED, PULMOVANCE, ARIKARES and ARIKAYCE are trademarks of Insmed Incorporated. This Form 10-Q also contains trademarks of third parties. Each trademark of another company appearing in this Form 10-Q is the property of its owner.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

INSMED INCORPORATED

Consolidated Balance Sheets

(in thousands, except par value and share data)


	As of		As of
	March 31, 2022		December 31, 2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	515,704	$	716,782
Marketable securities	119,415		—
Accounts receivable	25,722		24,351
Inventory	64,145		67,009
Prepaid expenses and other current assets	31,154		28,898
Total current assets	756,140		837,040
Marketable securities, long-term	29,551		50,043
Fixed assets, net	52,676		52,955
Finance lease right-of-use assets	17,814		9,256
Operating lease right-of-use assets	31,277		33,305
Intangibles, net	72,546		73,809
Goodwill	136,110		136,110
Other assets	57,201		50,990
Total assets	$	1,153,315	$	1,243,508

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	48,571	$	35,784
Accrued liabilities	53,289		60,665
Accrued compensation	13,639		28,581
Finance lease liabilities	125		609
Operating lease liabilities	9,625		9,527

Total current liabilities	125,249		135,166

Debt, long-term	783,156		566,588
Contingent consideration	66,120		75,668
Finance lease liabilities, long-term	23,509		14,103
Operating lease liabilities, long-term	19,875		21,441
Other long-term liabilities	15,526		20,074
Total liabilities	1,033,435		833,040

Shareholders’ equity:
Common stock, $0.01 par value; 500,000,000 authorized shares, 119,345,962 and 118,738,266 issued and outstanding shares at March 31, 2022 and December 31, 2021, respectively	1,193		1,187
Additional paid-in capital	2,428,582		2,673,556
Accumulated deficit	(2,309,665)		(2,265,243)
Accumulated other comprehensive income	(230)		968
Total shareholders’ equity	119,880		410,468
Total liabilities and shareholders’ equity	$	1,153,315	$	1,243,508

See accompanying notes to consolidated financial statements

Table of Contents

INSMED INCORPORATED

Consolidated Statements of Comprehensive Loss (unaudited)

(in thousands, except per share data)


	Three Months Ended March 31,
		2022		2021

Product revenues, net		$	53,107	$	40,214

Operating expenses:
Cost of product revenues (excluding amortization of intangible assets)		12,191		9,844
Research and development		84,356		61,390
Selling, general and administrative		56,748		51,550
Amortization of intangible assets		1,263		1,263
Change in fair value of deferred and contingent consideration liabilities		(11,618)		—
Total operating expenses		142,940		124,047

Operating loss		(89,833)		(83,833)

Investment income		137		33
Interest expense		(3,291)		(7,559)

Other expense, net		(1,249)		(43)
Loss before income taxes		(94,236)		(91,402)

Provision for income taxes		385		239

Net loss		$	(94,621)	$	(91,641)

Basic and diluted net loss per share		$	(0.80)	$	(0.89)

Weighted average basic and diluted common shares outstanding		118,929		103,040

Net loss		$	(94,621)	$	(91,641)
Other comprehensive income (loss):
Foreign currency translation loss		(494)		(103)
Unrealized loss on marketable securities		(704)		—
Total comprehensive loss		$	(95,819)	$	(91,744)

See accompanying notes to consolidated financial statements

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INSMED INCORPORATED

Consolidated Statements of Shareholders' Equity (unaudited)

(in thousands)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total
	Shares	Amount
Balance at December 31, 2020	102,763	$	1,028	$	2,105,252	$	(1,830,589)	$	193	$	275,884
Comprehensive loss:
Net loss						(91,641)				(91,641)
Other comprehensive income (loss)								(103)		(103)
Exercise of stock options and ESPP shares issuance	416	4		6,956						6,960