Insmed stock catapulted, breaking out of a consolidation early Tuesday, after the biotech company hit a "home run" with its treatment for pulmonary arterial hypertension.
Pulmonary arterial hypertension, or PAH, is a form of high blood pressure in the arteries of the lungs. Its symptoms are progressive and can include shortness of breath, fatigue, dizziness, chest pain and swelling of the extremities. Insmed's drug is an inhaled powder called treprostinil palmitil.
Insmed's ran its study for 16 weeks and took the final results 24 hours after patients received the drug. Treprostinil palmitil recipients had a 35% greater improvement in pulmonary vascular resistance than patients given a placebo. Pulmonary vascular resistance measures blood flow in the lungs. That was well above expectations for a 20% improvement, RBC Capital Markets analyst Leonid Timashev said in a report.
The treprostinil palmitil group had a 35.5-meter improvement in how far they could walk for six minutes, compared to the placebo group. The six-minute walk is a key test of lung function. RBC's Timashev had expected a lower 20-meter placebo-adjusted improvement.
Insmed Stock Hits A 'Home Run'
The result "comes in as our perceived 'home-run scenario' based on our analysis coming into the readout," he said. "We continue to anticipate a 15-25% upside move."
Similarly, Leerink Partners analyst Joseph Schwartz said the results exceeded his best-case scenario prediction. He says the results clearly differentiate from Tyvaso, another inhaled treprostinil powder from United Therapeutics. Tyvaso did $1.6 billion in sales in treatment for PAH and a similar disease called pulmonary hypertension and interstitial lung disease, or PH-ILD.
Tyvaso requires four doses daily and has a "relatively modest" benefit on six-minute walking distance, Schwartz said. Meanwhile, the midstage test results for Insmed's drug suggest it could be a once-daily administration.
He has an outperform rating on Insmed said.
United, Liquidia Stocks Tumble
Insmed stock shot 28.7% higher, closing at 90.93. Shares broke out of a consolidation with a buy point at 84.91.
United Therapeutics stock, on the other hand, slumped 14.3% to 281.36. Shares of Liquidia, which gained approval in May for its own inhaled treprostinil powder in PAH treatment, saw shares tumble 16.9% to 14.98.
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