Financial Data and Key Metrics Changes - Insmed reported strong commercial performance with double-digit year-over-year revenue growth globally, driven by the highest quarterly revenue ever achieved in the U.S. [32] - The company remains on track to achieve its 2025 full-year ARIKAYCE net revenue guidance of $400 to $425 million [33] - As of the end of the quarter, Insmed had approximately $1.9 billion in cash, cash equivalents, and marketable securities, indicating a strong financial position [33][34] Business Line Data and Key Metrics Changes - ARIKAYCE continues to show consistent year-over-year growth in its seventh year of launch, with significant contributions from the U.S., Europe, and Japan [6][32] - Brensocatib is anticipated to launch in the U.S. soon, with launches in Europe, the UK, and Japan expected in 2026 [9] - TPIP has produced positive results in two Phase 2 studies, with plans to enter Phase 3 for PH ILD in 2025 and for PAH in early 2026 [10] Market Data and Key Metrics Changes - In Japan, ARIKAYCE saw a 45% growth this quarter due to new targeting strategies [32] - Europe experienced a 48% growth driven primarily by strong demand in Germany, Switzerland, and Austria [33] - The U.S. sales team is conducting disease state education on bronchiectasis, which is expected to enhance market penetration [7] Company Strategy and Development Direction - Insmed aims to address over two million patients with serious diseases across multiple products and indications in the coming years [6] - The company is focused on advancing first and best-in-class therapies for patients facing serious diseases, with a strong emphasis on commercial readiness and patient access [15][30] - Insmed's culture supports collaboration and innovation across its research sites, which is expected to accelerate the development process [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming twelve months, anticipating a steady cadence of meaningful events that could significantly expand the company's impact on patients [5] - The company is prepared for the launch of brensocatib, with extensive preparations in place to ensure a successful rollout [22] - Management remains cautiously optimistic about the potential for brensocatib and TPIP, highlighting the importance of patient experience in driving future performance [69] Other Important Information - Insmed has been certified as a great place to work for the fifth consecutive year, reflecting employee satisfaction and commitment [30] - The company has over 30 preclinical programs in active development across its early-stage portfolio [11] Q&A Session Summary Question: What are the practical steps being taken to capture patients for brensocatib? - The company has initiated a disease state awareness campaign and has built relationships with physicians to identify suitable patients for treatment [40][44] Question: What is the feedback from payers regarding the approach to patients? - Payer feedback has been positive, with alignment on the criteria for patient eligibility, focusing on those with a bronchiectasis diagnosis and two or more exacerbations [54][56] Question: How does the company view the potential for TPIP in relation to competitor trials? - The company is optimistic about TPIP's potential and is prepared to advance it into Phase 3 studies quickly if competitor trials show positive results [62][64] Question: Can you elaborate on the interim futility analysis for HS? - The analysis will look for a signal of efficacy rather than a p-value, and an expert panel will determine whether to continue the trial based on the first 100 patients [90][92]

Financial Performance & Guidance - Worldwide ARIKAYCE revenue reached $107.4 million, an increase of 18.9%[43] - U.S. ARIKAYCE revenue was $68.7 million, up 7.7%[43] - Japan ARIKAYCE revenue was $30.7 million, a significant increase of 45.3%[43] - Europe & Rest of World ARIKAYCE revenue grew by 48.3% to $8.1 million[43] - The company is on track to achieve its 2025 ARIKAYCE revenue guidance of $405 to $425 million[44] - The company holds a strong capital position with approximately $1.9 billion in cash, cash equivalents, and marketable securities as of June 30, 2025[46] Clinical Development & Pipeline - All three late-stage assets (ARIKAYCE, brensocatib, and TPIP) have demonstrated clinical success[15] - Brensocatib is expected to launch in the U.S. in Q3 2025 for NCFB, pending regulatory approval[16] - Phase 2 BiRCh data for brensocatib in CRSsNP is expected by the end of 2025[16] - A futility analysis for the Phase 2 CEDAR trial of brensocatib in HS is anticipated in Q1 2026[16] - The Phase 2b study of TPIP in PAH exceeded expectations, showing a 35% reduction in PVR and a 35.5m improvement in 6MWD[39] - Phase 3 trial in PH-ILD is expected to initiate in 2H:25 and Phase 3 trial in PAH is expected to initiate in early 2026[16]

Financial Performance - ARIKAYCE total revenue for Q2 2025 was $107.4 million, reflecting a 19% growth compared to Q2 2024[1]. - The company anticipates full-year 2025 global ARIKAYCE revenues in the range of $405 million to $425 million, representing 11% to 17% year-over-year growth compared to 2024[15]. - The company reported a net loss of $321.7 million, or $1.70 per share, for Q2 2025, compared to a net loss of $300.6 million, or $1.94 per share, for Q2 2024[11]. - Insmed's total operating expenses for Q2 2025 were $420.3 million, compared to $379.2 million in Q2 2024[11]. Research and Development - Research and development (R&D) expenses for Q2 2025 were $177.2 million, up from $146.7 million in Q2 2024, primarily due to increased manufacturing and compensation costs[11]. - The Phase 3 ENCORE trial for ARIKAYCE is expected to have topline data available in the first half of 2026[3]. - The company plans to initiate a Phase 3 study of TPIP in patients with pulmonary hypertension associated with interstitial lung disease (PH-ILD) in the second half of 2025[5]. - Insmed is developing Brensocatib, an investigational drug for treating bronchiectasis and other neutrophil-mediated diseases, which is currently not approved for any indication[22]. - TPIP, an investigational dry powder formulation for pulmonary arterial hypertension, is being evaluated as a once-daily therapy and has not yet received approval[23]. - INS1201, a gene replacement therapy for Duchenne muscular dystrophy, is under development and has not been approved for any indication[24]. - Insmed's portfolio includes a diverse range of therapies focused on pulmonary and inflammatory conditions, with ongoing advancements in gene therapy and AI-driven protein engineering[41]. Financial Position - As of June 30, 2025, Insmed had cash, cash equivalents, and marketable securities totaling approximately $1.9 billion[15]. - Total assets increased to $2,479,857,000 as of June 30, 2025, up from $2,025,231,000 on December 31, 2024, representing a growth of approximately 22.4%[19]. - Current assets rose to $2,081,580,000, a significant increase from $1,621,661,000, marking a growth of about 28.3%[19]. - Total liabilities decreased to $1,230,122,000 from $1,739,852,000, reflecting a reduction of approximately 29.2%[19]. - Shareholders' equity surged to $1,249,735,000, up from $285,379,000, indicating a remarkable increase of about 338.5%[19]. - Cash and cash equivalents significantly increased to $1,284,324,000 from $555,030,000, a growth of approximately 131.3%[19]. Regulatory and Market Challenges - Insmed's only approved product, ARIKAYCE, faces risks in commercialization and regulatory approvals in the U.S., Europe, and Japan[44]. - The company is working towards obtaining full FDA approval for ARIKAYCE, which includes completing a confirmatory post-marketing clinical trial[44]. - Insmed is also focused on obtaining regulatory approvals for its product candidates, including brensocatib and TPIP, in various markets[44]. - The company acknowledges uncertainties in market acceptance and reimbursement for ARIKAYCE and its future products[44]. - Insmed has faced challenges in maintaining adequate manufacturing and clinical trial support for its products[44]. - The company is subject to risks related to its secured senior loan and royalty financing agreements, which may impact operations[44]. - Insmed's growth may be hindered by competition, regulatory changes, and potential intellectual property disputes[44]. - The company has a history of operating losses and may struggle to achieve profitability in the future[44]. - Insmed is also addressing the need for effective integration of recent acquisitions and management of growth[44]. - The company is cautious about the impact of economic conditions and potential disruptions on its operations[44].

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides a comprehensive overview of Insmed's financial performance, statements, and analysis [ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents Insmed Incorporated's unaudited consolidated financial statements, including the Balance Sheets, Statements of Comprehensive Loss, Statements of Shareholders' Equity, and Statements of Cash Flows, along with detailed notes explaining significant accounting policies, fair value measurements, revenue recognition, debt, equity, and other financial commitments for the periods ended June 30, 2025, and December 31, 2024 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This statement details Insmed's financial position, including assets, liabilities, and equity Balance Sheet Summary (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $1,284,324 | $555,030 | | Marketable securities | $572,441 | $878,796 | | Total current assets | $2,081,580 | $1,621,661 | | Total assets | $2,479,857 | $2,025,231 | | Total current liabilities | $311,681 | $297,528 | | Total liabilities | $1,230,122 | $1,739,852 | | Total shareholders' equity | $1,249,735 | $285,379 | - Total assets increased by **$454.6 million (22.4%)** from December 31, 2024, to June 30, 2025, primarily driven by a significant increase in cash and cash equivalents[10](index=10&type=chunk) - Total shareholders' equity saw a substantial increase of **$964.4 million (337.9%)** from December 31, 2024, to June 30, 2025, largely due to new equity issuances[10](index=10&type=chunk) [Consolidated Statements of Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) This statement presents Insmed's financial performance, detailing revenues, expenses, and net loss Comprehensive Loss Summary (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product revenues, net | $107,415 | $90,340 | $200,238 | $165,840 | | Total operating expenses | $420,291 | $379,244 | $761,254 | $600,249 | | Operating loss | $(312,876) | $(288,904) | $(561,016) | $(434,409) | | Net loss | $(321,686) | $(300,609) | $(578,269) | $(457,700) | | Basic and diluted net loss per share | $(1.70) | $(1.94) | $(3.12) | $(3.02) | - Product revenues, net, increased by **18.9%** for the three months ended June 30, 2025, and by **20.7%** for the six months ended June 30, 2025, compared to the respective prior-year periods[12](index=12&type=chunk) - Net loss increased for both the three-month and six-month periods ended June 30, 2025, primarily due to higher operating expenses, particularly R&D and SG&A[12](index=12&type=chunk) [Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) This statement details changes in Insmed's equity, including common stock, paid-in capital, and deficit Shareholders' Equity Summary (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :-------------------- | :------------ | :---------------- | :------------ | | Common Stock Amount | $2,111 | $1,794 | $1,667 | | Additional Paid-in Capital | $6,184,078 | $4,645,791 | $3,943,826 | | Accumulated Deficit | $(4,938,186) | $(4,359,917) | $(3,903,845) | | Total Shareholders' Equity | $1,249,735 | $285,379 | $38,818 | - Total shareholders' equity significantly increased from **$285.4 million** at December 31, 2024, to **$1,249.7 million** at June 30, 2025, primarily driven by net proceeds from common stock issuances and conversion of convertible notes[14](index=14&type=chunk)[124](index=124&type=chunk) - The accumulated deficit grew to **$(4,938.2) million** by June 30, 2025, reflecting ongoing net losses[14](index=14&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes Insmed's cash flows from operating, investing, and financing activities Cash Flow Activities (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(467,657) | $(306,987) |\n| Net cash provided by investing activities | $308,247 | $288,538 |\n| Net cash provided by financing activities | $886,804 | $784,515 |\n| Net increase in cash and cash equivalents | $729,294 | $764,425 |\n| Cash and cash equivalents at end of period | $1,284,324 | $1,246,799 | - Net cash used in operating activities increased by **$160.7 million** for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to increased net loss[18](index=18&type=chunk)[257](index=257&type=chunk) - Net cash provided by financing activities increased by **$102.3 million**, driven by proceeds from common stock offerings and convertible note conversions[18](index=18&type=chunk)[259](index=259&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. The Company and Basis of Presentation](index=8&type=section&id=1.%20The%20Company%20and%20Basis%20of%20Presentation) Insmed is a global biopharmaceutical company focused on serious diseases, with its primary commercial product ARIKAYCE approved in the US, Europe, and Japan for MAC lung disease - ARIKAYCE is approved in the US, Europe, and Japan for Mycobacterium avium complex (MAC) lung disease[20](index=20&type=chunk) - Key pipeline programs include brensocatib (bronchiectasis, other neutrophil-mediated diseases), TPIP (pulmonary hypertension), and INS1201 (Duchenne muscular dystrophy gene therapy)[20](index=20&type=chunk) - As of June 30, 2025, the Company had **$1,284.3 million** in cash and cash equivalents and **$572.4 million** in marketable securities, with an accumulated deficit of **$4.9 billion**[24](index=24&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines Insmed's key accounting policies, including the use of estimates, concentration of credit risk, accounting for finite-lived and indefinite-lived intangible assets, business combinations, leases, debt issuance costs, foreign currency translation, inventory valuation, and net loss per share calculation - The Company's three largest customers accounted for **28%**, **28%**, and **22%** of gross product revenue for the six months ended June 30, 2025, showing a slight shift in concentration compared to 2024[33](index=33&type=chunk)[34](index=34&type=chunk) - Indefinite-lived intangible assets (IPR&D) are tested for impairment annually as of October 1, with no impairment identified during the six months ended June 30, 2025[44](index=44&type=chunk)[46](index=46&type=chunk) - New accounting standards ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation) are being evaluated for their impact on future financial statements, with ASU 2023-09 effective for fiscal years beginning after December 15, 2024[58](index=58&type=chunk)[60](index=60&type=chunk) [3. Fair Value Measurements](index=13&type=section&id=3.%20Fair%20Value%20Measurements) This note details the fair value measurements of Insmed's financial assets and liabilities, categorizing them into Level 1, 2, or 3 based on input observability Fair Value Measurements (in millions) | Metric (in millions) | June 30, 2025 (Carrying Value) | December 31, 2024 (Carrying Value) | | :------------------- | :----------------------------- | :--------------------------------- | | Cash and cash equivalents | $1,284.3 | $555.0 | | Marketable securities | $572.4 | $878.8 | | Contingent consideration | $246.2 | $168.9 | - Contingent consideration liabilities, classified as Level 3, increased from **$168.9 million** at December 31, 2024, to **$246.2 million** at June 30, 2025, primarily due to changes in fair value[62](index=62&type=chunk)[76](index=76&type=chunk) - The deferred consideration liabilities were fully settled by December 31, 2024, and no longer exist as of June 30, 2025[70](index=70&type=chunk)[76](index=76&type=chunk) [4. Product Revenues, Net](index=16&type=section&id=4.%20Product%20Revenues,%20Net) Insmed recognizes product revenue from ARIKAYCE sales, net of various allowances, showing growth across all regions for both the three and six months ended June 30, 2025, compared to 2024 Net Product Revenues by Region (in thousands) | Region (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | US | $68,683 | $63,793 | $132,958 | $120,142 | | Japan | $30,672 | $21,111 | $52,755 | $36,002 | | Europe and rest of world | $8,060 | $5,436 | $14,525 | $9,696 | | Total product revenues, net | $107,415 | $90,340 | $200,238 | $165,840 | - Total product revenues, net, increased by **18.9%** for the three months and **20.7%** for the six months ended June 30, 2025, driven by growth in all geographic segments[83](index=83&type=chunk) - Japan and Europe/rest of world segments showed higher percentage growth rates (**45.3%** and **48.3%** respectively for Q2 2025) compared to the US (**7.7%**)[83](index=83&type=chunk) [5. Inventory](index=17&type=section&id=5.%20Inventory) The Company's inventory, valued at the lower of cost and net realizable value using FIFO, increased to **$107.6 million** as of June 30, 2025, from **$98.6 million** at December 31, 2024, with finished goods showing the largest increase Inventory Breakdown (in thousands) | Inventory Category (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Raw materials | $22,304 | $19,682 | | Work-in-process | $36,028 | $39,932 | | Finished goods | $49,273 | $38,964 | | Total Inventory | $107,605 | $98,578 | - Total inventory increased by **$9.0 million (9.1%)** from December 31, 2024, to June 30, 2025, primarily due to an increase in finished goods[91](index=91&type=chunk) [6. Intangibles, Net and Goodwill](index=17&type=section&id=6.%20Intangibles,%20Net%20and%20Goodwill) Insmed's intangible assets include finite-lived assets amortized over 12 years and indefinite-lived assets which are not amortized but tested for impairment, while goodwill remains unchanged Intangible Assets and Goodwill (in thousands) | Intangible Asset (in thousands) | December 31, 2024 | June 30, 2025 | | :------------------------------ | :---------------- | :------------ | | Acquired ARIKAYCE R&D | $27,888 | $25,463 | | Acquired IPR&D | $29,600 | $29,600 | | PARI milestones | $1,164 | $1,063 | | Total Intangibles, Net | $58,652 | $56,126 | - Goodwill remained constant at **$136.1 million** as of June 30, 2025, and December 31, 2024, resulting from the August 2021 Business Acquisition[96](index=96&type=chunk) - Amortization of finite-lived intangible assets is estimated at approximately **$5.1 million** per year for the next five years[92](index=92&type=chunk) [7. Fixed Assets, Net](index=18&type=section&id=7.%20Fixed%20Assets,%20Net) Fixed assets, net, increased to **$89.995 million** as of June 30, 2025, from **$80.052 million** at December 31, 2024, primarily due to additions in lab equipment and leasehold improvements, partially offset by depreciation Fixed Assets Breakdown (in thousands) | Asset Description (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Lab equipment | $31,883 | $26,753 | | Leasehold improvements | $51,458 | $38,058 | | Construction in progress | $45,877 | $51,127 | | Total Fixed Assets, Net | $89,995 | $80,052 | - The net increase in fixed assets was **$9.9 million (12.4%)** from December 31, 2024, to June 30, 2025[97](index=97&type=chunk) [8. Accounts Payable and Accrued Liabilities](index=19&type=section&id=8.%20Accounts%20Payable%20and%20Accrued%20Liabilities) Total accounts payable and accrued liabilities increased to **$305.0 million** at June 30, 2025, from **$285.2 million** at December 31, 2024, driven by increases in deferred and contingent consideration, accrued sales allowances, and professional fees Accounts Payable and Accrued Liabilities (in thousands) | Liability Category (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Accounts payable and other accrued operating expenses | $74,054 | $73,033 | | Accrued compensation and employee related costs | $50,198 | $80,312 | | Accrued sales allowances and related costs | $22,956 | $16,762 | | Deferred and contingent consideration | $65,700 | $24,700 | | Total Accounts Payable and Accrued Liabilities | $305,019 | $285,209 | - Deferred and contingent consideration increased significantly from **$24.7 million** to **$65.7 million**, reflecting changes in fair value[99](index=99&type=chunk) - Accrued compensation and employee related costs decreased by **$30.1 million**, while accrued sales allowances increased by **$6.2 million**[99](index=99&type=chunk) [9. Leases](index=19&type=section&id=9.%20Leases) Insmed's lease portfolio primarily consists of operating leases for office, laboratory, and manufacturing facilities, with finance leases for corporate headquarters and a research facility - Variable lease payments were **$3.4 million** for Q2 2025 (up from **$3.2 million** in Q2 2024) and **$5.9 million** for the six months ended June 30, 2025 (down from **$8.1 million** in 2024)[102](index=102&type=chunk) - The Company has incurred **$64.2 million** in costs for future manufacturing facility and equipment leases with Patheon UK Limited, which will be recorded as operating lease ROU assets and liabilities upon commencement[104](index=104&type=chunk) [10. Debt](index=20&type=section&id=10.%20Debt) Insmed's long-term debt decreased significantly due to the conversion of all outstanding 2028 Convertible Notes into common stock in Q2 2025, with remaining debt consisting of secured senior term loans Debt Summary (in thousands) | Debt Category (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------- | :------------ | :---------------- | | Convertible notes | $0 | $567,164 | | Term Loans | $538,508 | $536,218 | | Total Debt, long-term | $538,508 | $1,103,382 | - All **$567.5 million** aggregate principal amount of 2028 Convertible Notes were converted into **17,756,196 shares** of common stock in Q2 2025, eliminating this debt[108](index=108&type=chunk) - The Term Loans were amended in October 2024, extending maturity to September 30, 2029, and fixing the interest rate at **9.6%** per annum, with repayments starting January 3, 2028[112](index=112&type=chunk) Interest Expense (in thousands) | Interest Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total debt interest expense | $20,737 | $20,703 | $41,782 | $41,709 | | Finance lease interest expense | $508 | $564 | $1,032 | $1,100 | | Total interest expense | $21,245 | $21,267 | $42,814 | $42,309 | [11. Royalty Financing Agreement](index=22&type=section&id=11.%20Royalty%20Financing%20Agreement) Insmed has a Royalty Financing Agreement with OrbiMed, providing **$150.0 million** in exchange for royalties on ARIKAYCE and brensocatib net sales, amortized using the effective interest method - The agreement entails royalties of **4%** on ARIKAYCE global net sales (increasing to **4.5%** after September 1, 2025) and **0.75%** on brensocatib global net sales, if approved[118](index=118&type=chunk) - The total Revenue Interest Payments are capped at **1.8x** (or **1.9x** under certain conditions) of the **$150.0 million** purchase price[118](index=118&type=chunk) Royalty Financing Agreement Liability (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Twelve Months Ended December 31, 2024 | | :-------------------- | :----------------------------- | :------------------------------------ | | Royalty Financing Agreement liability - beginning balance | $163,671 | $158,162 | | Revenue Interest Payments paid and payable | $(8,010) | $(14,535) | | Interest expense recognized | $10,215 | $20,044 | | Royalty Financing Agreement liability - ending balance | $165,876 | $163,671 | [12. Shareholders' Equity](index=23&type=section&id=12.%20Shareholders'%20Equity) Insmed's common stock outstanding increased significantly due to the conversion of convertible notes and a June 2025 underwritten public offering, which generated **$823.1 million** in net proceeds - As of June 30, 2025, there were **211,110,658 shares** of common stock issued and outstanding[122](index=122&type=chunk) - In Q2 2025, **17,922,626 shares** were issued from the conversion of 2028 Convertible Notes[123](index=123&type=chunk) - A June 2025 underwritten offering of **8,984,375 shares** generated **$823.1 million** in net proceeds[124](index=124&type=chunk) [13. Stock-Based Compensation](index=24&type=section&id=13.%20Stock-Based%20Compensation) Insmed's stock-based compensation expense increased significantly for both the three and six months ended June 30, 2025, primarily due to higher R&D and SG&A compensation Stock-Based Compensation Expense (in thousands) | Expense Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development expenses | $15,970 | $11,301 | $33,350 | $21,636 | | Selling, general and administrative expenses | $27,006 | $11,985 | $48,888 | $23,100 | | Total stock-based compensation expense | $42,976 | $23,286 | $82,238 | $44,736 | - Total stock-based compensation expense increased by **84.5%** for the three months and **83.8%** for the six months ended June 30, 2025, compared to the prior year[136](index=136&type=chunk) - As of June 30, 2025, unrecognized compensation expense totaled **$170.3 million** for stock options and **$152.4 million** for RSUs[132](index=132&type=chunk) [14. Income Taxes](index=25&type=section&id=14.%20Income%20Taxes) Insmed recorded income tax provisions primarily due to taxable income in certain international subsidiaries, with a full valuation allowance against deferred tax assets in jurisdictions with net losses Income Tax Provision (in millions) | Income Tax Provision (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Provision for income taxes | $1.2 | $0.8 | $2.2 | $1.4 | - The Company has incurred net operating losses since inception (except 2009) and has a full valuation allowance against deferred tax assets[138](index=138&type=chunk) - The recently enacted H.R.1, reinstating R&D expense deductibility, is not expected to significantly impact the Company's near-term financial position due to existing net operating losses[140](index=140&type=chunk) [15. Commitments and Contingencies](index=25&type=section&id=15.%20Commitments%20and%20Contingencies) This section covers Insmed's rent expenses and legal proceedings, with rent expense increasing for both periods and management anticipating no material adverse effect from legal matters Rent Expense (in millions) | Rent Expense (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Rent expense | $3.3 | $2.8 | $6.8 | $5.9 | - Rent expense increased by **17.9%** for the three months and **15.3%** for the six months ended June 30, 2025, compared to the prior year[141](index=141&type=chunk) - The Company is involved in various lawsuits and claims in the ordinary course of business, but management anticipates no material adverse effect on financial results[142](index=142&type=chunk) [16. Acquisitions](index=25&type=section&id=16.%20Acquisitions) In August 2021, Insmed acquired Motus Biosciences, Inc. and AlgaeneX, Inc., accounted for as a business combination involving initial payments and future contingent consideration tied to milestones - The acquisition of Motus and AlgaeneX in August 2021 was accounted for as a business combination, with a total purchase price of approximately **$165.5 million**[145](index=145&type=chunk)[149](index=149&type=chunk) - Contingent consideration for Motus equityholders includes up to **5,348,572 shares** of common stock for development/regulatory milestones and **$35 million** for net sales milestones[145](index=145&type=chunk) - Contingent consideration for AlgaeneX equityholders includes **368,867 shares** for a development milestone and a mid-single digit licensing fee on future manufacturing technology payments[146](index=146&type=chunk) [17. Segment Reporting](index=26&type=section&id=17.%20Segment%20Reporting) Insmed operates as a single operating segment, with the CEO managing the business on a consolidated basis and evaluating performance based on total revenues, expenses by function, and net loss - The Company manages its business activities on a consolidated basis and operates as a single operating segment[151](index=151&type=chunk) - The CODM reviews total revenues, total expenses, and expenses by function, using net loss to evaluate segment performance[152](index=152&type=chunk)[154](index=154&type=chunk) Segment Performance (in thousands) | Segment Item (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product revenues, net | $107,415 | $90,340 | $200,238 | $165,840 | | Cost of product revenues | $28,075 | $20,964 | $49,353 | $38,421 | | ARIKAYCE external R&D expenses | $11,003 | $14,896 | $23,124 | $28,822 | | Brensocatib external R&D expenses | $33,560 | $37,806 | $54,221 | $57,324 | | TPIP external R&D expenses | $20,649 | $14,773 | $29,802 | $28,555 | | R&D compensation and benefit-related expenses | $56,389 | $43,908 | $109,947 | $85,368 | | SG&A compensation and benefit-related expenses | $51,320 | $35,087 | $106,156 | $67,672 | | Segment net loss | $(321,686) | $(300,609) | $(578,269) | $(457,700) | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=28&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on Insmed's financial performance and operational highlights for the three and six months ended June 30, 2025, covering revenues, expenses, investment income, interest expense, strategic priorities, and liquidity [Cautionary Note Regarding Forward-Looking Statements](index=28&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) The report contains forward-looking statements subject to substantial risks and uncertainties, including successful commercialization of ARIKAYCE, regulatory approvals for pipeline products, market acceptance, reimbursement, manufacturing dependencies, and intellectual property disputes - The report contains forward-looking statements subject to substantial risks and uncertainties, including successful commercialization of ARIKAYCE, regulatory approvals for pipeline products, market acceptance, reimbursement, manufacturing dependencies, and intellectual property disputes[157](index=157&type=chunk)[158](index=158&type=chunk) - Key risks include failure to obtain full FDA approval for ARIKAYCE, delays in regulatory approvals for brensocatib and TPIP, and the inability to maintain adequate reimbursement[158](index=158&type=chunk) [OVERVIEW](index=30&type=section&id=OVERVIEW) Insmed is a global biopharmaceutical company focused on serious diseases, with ARIKAYCE as its first commercial product and a pipeline including brensocatib, TPIP, and INS1201, expecting to fund operations for at least the next 12 months - Insmed is a global biopharmaceutical company focused on serious diseases, with ARIKAYCE as its first commercial product and a pipeline including brensocatib, TPIP, and INS1201[163](index=163&type=chunk) - The Company had an accumulated deficit of **$4.9 billion** through June 30, 2025, and expects to fund operations for at least the next 12 months with current cash and marketable securities[164](index=164&type=chunk) - Key near-term milestones include anticipated topline data from the ARIKAYCE ENCORE trial in H1 2026, FDA target action date for brensocatib NDA in August 2025, and planned Phase 3 studies for TPIP in PH-ILD (H2 2025) and PAH (early 2026)[168](index=168&type=chunk)[171](index=171&type=chunk) [KEY COMPONENTS OF OUR RESULTS OF OPERATIONS](index=38&type=section&id=KEY%20COMPONENTS%20OF%20OUR%20RESULTS%20OF%20OPERATIONS) This section details the key components driving Insmed's results of operations, including product revenues from ARIKAYCE, and the composition of R&D and SG&A expenses - Product revenues, net, are derived from ARIKAYCE sales, adjusted for customer credits, rebates, and chargebacks[221](index=221&type=chunk) - R&D expenses include personnel costs, clinical study costs, manufacturing of product candidates, and payments for license rights, with a focus on CMOs and CROs[223](index=223&type=chunk) - SG&A expenses cover executive, finance, legal, commercial, and HR functions, including professional fees and certain ARIKAYCE milestones[224](index=224&type=chunk) [RESULTS OF OPERATIONS](index=39&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes Insmed's financial performance for the reported periods, detailing changes in revenues, expenses, and net loss [Comparison of the Three Months Ended June 30, 2025 and 2024](index=39&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) For Q2 2025, Insmed reported an **18.9%** increase in net product revenues, driven by ARIKAYCE sales growth across all regions, while operating expenses rose significantly due to increased R&D and SG&A costs, leading to a higher net loss Financial Performance (in thousands) | Metric (in thousands) | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Product revenues, net | $107,415 | $90,340 | $17,075 | 18.9% | | Cost of product revenues | $28,075 | $20,964 | $7,111 | 33.9% | | R&D expenses | $177,190 | $146,748 | $30,442 | 20.7% | | SG&A expenses | $154,763 | $106,569 | $48,194 | 45.2% | | Investment income | $13,225 | $10,285 | $2,940 | 28.6% | - R&D expenses increased primarily due to a **$25.2 million** rise in manufacturing expenses and a **$17.2 million** increase in compensation and benefit-related costs[232](index=232&type=chunk) - SG&A expenses were driven up by a **$31.3 million** increase in compensation and stock-based compensation, and an **$11.8 million** rise in professional fees, largely for brensocatib commercial readiness[234](index=234&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=42&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) For the first half of 2025, Insmed's net product revenues grew **20.7%**, with ARIKAYCE sales increasing across all geographies, while operating expenses saw substantial increases in R&D and SG&A, leading to a wider net loss Financial Performance (in thousands) | Metric (in thousands) | H1 2025 | H1 2024 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Product revenues, net | $200,238 | $165,840 | $34,398 | 20.7% | | Cost of product revenues | $49,353 | $38,421 | $10,932 | 28.5% | | R&D expenses | $329,767 | $267,831 | $61,936 | 23.1% | | SG&A expenses | $302,308 | $199,671 | $102,637 | 51.4% | | Investment income | $27,131 | $19,068 | $8,063 | 42.3% | - R&D expenses increased due to a **$36.3 million** rise in compensation and stock-based compensation, and a **$33.0 million** increase in manufacturing expenses, partially offset by a **$12.5 million** milestone payment to AstraZeneca in 2024[243](index=243&type=chunk) - SG&A expenses surged due to a **$64.3 million** increase in compensation and stock-based compensation, and a **$27.7 million** rise in professional fees, both driven by brensocatib commercial readiness[245](index=245&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=44&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Cash and cash equivalents increased by **$729.3 million** to **$1,284.3 million** as of June 30, 2025, primarily due to a June 2025 common stock offering, with the Company believing it has sufficient funds for at least the next 12 months - Cash and cash equivalents increased by **$729.3 million** to **$1,284.3 million** as of June 30, 2025, primarily due to an **$823.6 million** net proceeds from a June 2025 common stock offering[252](index=252&type=chunk)[256](index=256&type=chunk) - Net cash used in operating activities increased to **$467.7 million** for the six months ended June 30, 2025, from **$307.0 million** in the prior year, reflecting higher commercial, clinical, and manufacturing activities[257](index=257&type=chunk) - The Company believes it has sufficient funds for at least the next 12 months but may raise additional capital opportunistically for operations, commercialization, and pipeline development[255](index=255&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=45&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) There have been no material changes to the Company's critical accounting policies and estimates as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the Company's critical accounting policies and estimates as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[262](index=262&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=45&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Insmed's market risk disclosures indicate that a **10%** change in interest rates would not materially affect the fair value of its debt or future earnings/cash flows as of June 30, 2025, and foreign currency fluctuations have not materially impacted results - As of June 30, 2025, the Company held **$1,284.3 million** in cash and cash equivalents (money market funds) and **$572.4 million** in marketable securities[263](index=263&type=chunk) - A **10%** change in interest rates would not have a material effect on the fair value of the Company's debt or its future earnings/cash flows[264](index=264&type=chunk) - Foreign currency exchange rate fluctuations have not materially affected the Company's results of operations[265](index=265&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=46&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that Insmed's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of June 30, 2025[266](index=266&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[267](index=267&type=chunk) [PART II. OTHER INFORMATION](index=46&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and other relevant information [ITEM 1. LEGAL PROCEEDINGS](index=46&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Insmed is periodically involved in legal proceedings arising in the ordinary course of business, and management does not anticipate a material adverse effect on the Company's financial position, results of operations, or cash flows - The Company is a party to various lawsuits and claims in the ordinary course of business[269](index=269&type=chunk) - Management does not expect these legal proceedings to have a material adverse effect on the Company's financial condition, results of operations, or cash flows[269](index=269&type=chunk) [ITEM 1A. RISK FACTORS](index=46&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section highlights that Insmed's business is subject to substantial risks and uncertainties, advising readers to carefully consider the risk factors detailed in this Quarterly Report on Form 10-Q and other SEC filings - The Company's business is subject to substantial risks and uncertainties, which could materially and adversely affect its business, financial condition, results of operations, prospects for growth, and stock value[270](index=270&type=chunk) - Readers are advised to review risk factors in this Form 10-Q and the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[270](index=270&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=46&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) In Q2 2025, Insmed issued a total of **17,922,626 shares** of common stock upon the conversion of **$572.9 million** aggregate principal amount of 2028 Convertible Notes, with no proceeds received by the Company from these conversions - In Q2 2025, **17,756,196 shares** of common stock were issued from the conversion of **$567.5 million** of 2028 Convertible Notes[271](index=271&type=chunk) - An additional **166,430 shares** were issued from the conversion of **$5.4 million** of 2028 Convertible Notes prior to the redemption announcement[272](index=272&type=chunk) - The Company did not receive any proceeds from these conversions, which were issued under Section 3(a)(9) of the Securities Act[271](index=271&type=chunk)[272](index=272&type=chunk) [ITEM 5. OTHER INFORMATION](index=46&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section details Rule 10b5-1 trading plans adopted by officers and directors during Q2 2025, including a plan by S. Nicole Schaeffer for **76,520 shares**, and 'sell-to-cover' arrangements for RSU vesting - S. Nicole Schaeffer, Chief People Strategy Officer, adopted a Rule 10b5-1 trading plan on June 13, 2025, for a maximum of **76,520 shares**[275](index=275&type=chunk) - Officers entered into 'sell-to-cover' arrangements for RSUs granted in May 2025, to satisfy tax withholding obligations upon vesting[276](index=276&type=chunk) [ITEM 6. EXHIBITS](index=47&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, a consulting agreement, amendments to the incentive plan, certifications from the CEO and CFO, and XBRL financial data - Exhibits include Articles of Incorporation, Amended and Restated Bylaws, a Consulting Agreement, and Amendment No. 2 to the 2019 Incentive Plan[279](index=279&type=chunk) - Certifications from the CEO and CFO (pursuant to Sarbanes-Oxley Act Sections 302 and 906) are included[279](index=279&type=chunk) - The financial statements are provided in iXBRL format as Exhibit 101[279](index=279&type=chunk) [SIGNATURE](index=48&type=section&id=SIGNATURE) The report is duly signed on behalf of Insmed Incorporated by Sara Bonstein, Chief Financial Officer (Principal Financial and Accounting Officer), on August 7, 2025 - The report was signed by Sara Bonstein, Chief Financial Officer, on August 7, 2025[283](index=283&type=chunk)

Wall Street analysts forecast that Insmed (INSM) will report quarterly loss of -$1.30 per share in its upcoming release, pointing to a year-over-year increase of 33%. It is anticipated that revenues will amount to $103.42 million, exhibiting an increase of 14.5% compared to the year-ago quarter. The current level reflects a downward revision of 1.1% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their i ...

Wall Street expects a year-over-year increase in earnings on higher revenues when Insmed (INSM) reports results for the quarter ended June 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 7. On the o ...

Core Viewpoint - Insmed Incorporated will release its second-quarter 2025 financial results on August 7, 2025, and will host a conference call for investors to discuss these results and provide a business update [1][2]. Company Overview - Insmed is a global biopharmaceutical company focused on delivering first- and best-in-class therapies for patients with serious diseases, with a diverse portfolio of approved and investigational medicines [4]. - The company is advancing programs primarily in pulmonary and inflammatory conditions, including a therapy approved in the U.S., Europe, and Japan for a chronic lung disease [4]. - Insmed's early-stage programs involve various technologies such as gene therapy, AI-driven protein engineering, and synthetic rescue [4]. Conference Call Details - The conference call for investors will begin at 8:00 a.m. ET on August 7, 2025, and can be accessed via phone or webcast [2]. - A replay of the conference call will be available approximately one hour after its completion until August 14, 2025 [3].

Core Insights - Insmed Inc experienced a significant stock surge of 45% in the last month, driven by successful Phase IIb trial results for its inhalation therapy TPIP in pulmonary arterial hypertension (PAH) [2] - The company is currently trading at a high valuation of 35 times sales, which translates to a low sales yield of 2.8%, raising concerns about its sustainability [3] - Insmed's stock premium is primarily attributed to the positive trial results and a $750 million capital raise aimed at pipeline expansion, leading to investor optimism [4][5] Financial Performance - Insmed projects global revenues for its product ARIKAYCE to be between $405 million and $425 million in 2025, indicating an 11-17% growth compared to 2024 [6] - The company is expected to remain unprofitable into 2026 due to ongoing investments in research and development for pipeline products [6] Future Outlook - The FDA's decision on brensocatib in August and the initiation of Phase 3 trials for TPIP are critical upcoming milestones that could significantly impact Insmed's stock performance [7] - Successful execution of Phase 3 trials and commercial launches of both brensocatib and TPIP will be essential for maintaining the current premium valuation [7][8]

Core Viewpoint - Insmed Incorporated has announced a public offering of 7,812,500 shares of common stock at a price of $96.00 per share, aiming to raise approximately $750 million in gross proceeds before expenses [1][2]. Group 1: Offering Details - The public offering is priced at $96.00 per share, with gross proceeds expected to be around $750 million [1]. - Insmed has granted underwriters a 30-day option to purchase an additional 1,171,875 shares [1]. - The offering is expected to close on June 13, 2025, subject to customary closing conditions [3]. Group 2: Use of Proceeds - The net proceeds will be used to fund research and development of brensocatib, pre-commercial and commercialization activities related to brensocatib, and further development of ARIKAYCE® [2]. - Additional funds will support the research and development of treprostinil palmitil inhalation powder (TPIP), INS1201, and other pre-clinical research product candidates, as well as general corporate purposes including business expansion [2]. Group 3: Company Overview - Insmed is a global biopharmaceutical company focused on delivering first- and best-in-class therapies for serious diseases, with a diverse portfolio of approved and investigational medicines [6]. - The company is advancing programs primarily in pulmonary and inflammatory conditions, including a therapy approved in the U.S., Europe, and Japan for a chronic lung disease [6]. - Insmed's research includes a variety of technologies such as gene therapy, AI-driven protein engineering, and synthetic rescue [6].

Core Viewpoint - Insmed Incorporated plans to offer and sell $650 million of its common stock in an underwritten public offering, with an additional option for underwriters to purchase up to $97.5 million more [1] Group 1: Offering Details - The public offering is subject to market conditions and there is no assurance regarding the completion or terms of the offering [1] - Goldman Sachs & Co. LLC and Leerink Partners are acting as joint book-running managers for the offering [2] - The offering is made pursuant to Insmed's shelf registration statement on Form S-3, which became effective on May 19, 2023 [3] Group 2: Company Overview - Insmed is a global biopharmaceutical company focused on delivering first- and best-in-class therapies for serious diseases [5] - The company has a diverse portfolio of approved and investigational medicines, particularly in pulmonary and inflammatory conditions [5] - Insmed's advanced programs include a therapy approved in the U.S., Europe, and Japan for a chronic lung disease [5] - The company is headquartered in Bridgewater, New Jersey, with offices and research locations in the U.S., Europe, and Japan [6]