insm-20240331

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, 2024

☐ 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 6, 2024, there were 148,604,548 shares of the registrant’s common stock outstanding.

INSMED INCORPORATED

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2024

INDEX


PART I. FINANCIAL INFORMATION

ITEM 1	Consolidated Financial Statements

	Consolidated Balance Sheets as of March 3 1 , 202 4 (unaudited) and December 31, 2023	3

	Consolidated Statements of Comprehensive Loss (unaudited) for the three months ended March 31 , 202 4 and 202 3	4

	Consolidated Statements of Shareholders' Deficit (unaudited) for the three months ended March 31 , 202 4 and 202 3	5

	Consolidated Statements of Cash Flows (unaudited) for the three months ended March 3 1 , 202 4 and 202 3	6

	Notes to Consolidated Financial Statements (unaudited)	7

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
ITEM 3	Quantitative and Qualitative Disclosures about Market Risk	42
ITEM 4	Controls and Procedures	43

PART II. OTHER INFORMATION

ITEM 1	Legal Proceedings	43
ITEM 1A	Risk Factors	43
ITEM 2	Unregistered Sales of Equity Securities , Use of Proceeds, and Issuer Purchases of Equity Securities	44
ITEM 5	Other Information	44
ITEM 6	Exhibits	45

SIGNATURE		46

Unless the context otherwise indicates, references in this Form 10-Q to “Insmed Incorporated” refers to Insmed Incorporated, a Virginia corporation, and the “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.

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, 2024		December 31, 2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	595,729	$	482,374
Marketable securities	—		298,073
Accounts receivable	37,162		41,189
Inventory	82,957		83,248
Prepaid expenses and other current assets	42,874		24,179
Total current assets	758,722		929,063

Fixed assets, net	68,660		65,384
Finance lease right-of-use assets	20,307		20,985
Operating lease right-of-use assets	17,157		18,017
Intangibles, net	62,441		63,704
Goodwill	136,110		136,110
Other assets	95,698		96,574
Total assets	$	1,159,095	$	1,329,837

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable and accrued liabilities	$	189,362	$	214,987
Current portion of long-term debt	224,194		—

Finance lease liabilities	2,695		2,610
Operating lease liabilities	4,609		8,032

Total current liabilities	420,860		225,629

Debt, long-term	939,081		1,155,313
Royalty financing agreement	156,967		155,034
Contingent consideration	63,700		84,600
Finance lease liabilities, long-term	26,320		27,026
Operating lease liabilities, long-term	13,809		11,013
Other long-term liabilities	3,166		3,145
Total liabilities	1,623,903		1,661,760

Shareholders’ equity:
Common stock, $0.01 par value; 500,000,000 authorized shares, 148,560,882 and 147,977,960 issued and outstanding shares at March 31, 2024 and December 31, 2023, respectively	1,486		1,480
Additional paid-in capital	3,138,578		3,113,487
Accumulated deficit	(3,603,236)		(3,446,145)
Accumulated other comprehensive loss	(1,636)		(745)
Total shareholders’ deficit	(464,808)		(331,923)
Total liabilities and shareholders’ deficit	$	1,159,095	$	1,329,837

See accompanying notes to the unaudited consolidated financial statements

INSMED INCORPORATED

Consolidated Statements of Comprehensive Loss (unaudited)

(in thousands, except per share data)


	Three Months Ended March 31,
	2024		2023

Product revenues, net	$	75,500	$	65,214

Operating expenses:
Cost of product revenues (excluding amortization of intangible assets)	17,457		13,830
Research and development	121,083		127,865
Selling, general and administrative	93,102		79,914
Amortization of intangible assets	1,263		1,263
Change in fair value of deferred and contingent consideration liabilities	(11,900)		(9,500)
Total operating expenses	221,005		213,372

Operating loss	(145,505)		(148,158)

Investment income	8,783		10,524
Interest expense	(21,042)		(20,003)
Change in fair value of interest rate swap	2,362		(1,533)

Other expense, net	(1,100)		(111)
Loss before income taxes	(156,502)		(159,281)

Provision for income taxes	589		483

Net loss	$	(157,091)	$	(159,764)

Basic and diluted net loss per share	$	(1.06)	$	(1.17)

Weighted average basic and diluted common shares outstanding	148,456		136,355

Net loss	$	(157,091)	$	(159,764)
Other comprehensive income (loss):
Foreign currency translation losses	(855)		(171)
Unrealized (loss) gain on marketable securities	(36)		498
Total comprehensive loss	$	(157,982)	$	(159,437)

See accompanying notes to the unaudited consolidated financial statements

INSMED INCORPORATED

Consolidated Statements of Shareholders' Deficit (unaudited)

(in thousands)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total
	Shares	Amount
Balance at December 31, 2022	135,654	$	1,357	$	2,782,416	$	(2,696,578)	$	756	$	87,951
Comprehensive loss:
Net loss						(159,764)				(159,764)
Other comprehensive income								327		327
Exercise of stock options and ESPP shares	82	1		1,138						1,139

Issuance of common stock for vesting of RSUs	193	1								1

Issuance of common stock for asset acquisition	500	5		9,245						9,250
Stock-based compensation expense				16,443						16,443
Balance at March 31, 2023	136,429	$	1,364	$	2,809,242	$	(2,856,342)	$	1,083	$	(44,653)

Balance at December 31, 2023	147,978	$	1,480	$	3,113,487	$	(3,446,145)	$	(745)	$	(331,923)
Comprehensive loss:
Net loss						(157,091)				(157,091)
Other comprehensive loss								(891)		(891)
Exercise of stock options and ESPP shares issuance	217	2		4,050						4,052
Net proceeds from issuance of common stock				(409)						(409)
Issuance of common stock for vesting of RSUs	366	4								4


Stock-based compensation expense				21,450						21,450
Balance at March 31, 2024	148,561	$	1,486	$	3,138,578	$	(3,603,236)	$	(1,636)	$	(464,808)

See accompanying notes to the unaudited consolidated financial statements

INSMED INCORPORATED

Consolidated Statements of Cash Flows (unaudited)

(in thousands)


	Three Months Ended March 31,
	2024		2023
Operating activities
Net loss	$	(157,091)	$	(159,764)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,588		1,248
Amortization of intangible assets	1,263		1,263
Stock-based compensation expense	21,450		16,443

Amortization of debt issuance costs	1,851		1,724
Paid-in-kind interest capitalized	6,242		5,456
Royalty financing non-cash interest expense	4,822		2,615
Accretion of discount on marketable securities, net	(1,963)		—
Finance lease amortization expense	678		678
Non-cash operating lease expense	6,516		2,491
Change in fair value of deferred and contingent consideration liabilities	(11,900)		(9,500)
Change in fair value of interest rate swap	(2,362)		1,533
Vertuis acquisition	—		10,250

Changes in operating assets and liabilities:
Accounts receivable	2,955		(860)
Inventory	(598)		(1,187)
Prepaid expenses and other current assets	(19,330)		(3,199)
Other assets	333		(5,231)
Accounts payable and accrued liabilities	(32,345)		(8,841)
Other liabilities	(

SEC Form 10-Q filed by Insmed Incorporated