Insmed(INSM) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Consolidated Financial Statements Unaudited consolidated financial statements for Q1 2022 report $53.1 million in revenue and a $94.6 million net loss Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 (unaudited) | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $515,704 | $716,782 | | Total assets | $1,153,315 | $1,243,508 | | Total liabilities | $1,033,435 | $833,040 | | Total shareholders' equity | $119,880 | $410,468 | Consolidated Statement of Comprehensive Loss Highlights (in thousands, except per share data) | Account | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Product revenues, net | $53,107 | $40,214 | | Research and development | $84,356 | $61,390 | | Selling, general and administrative | $56,748 | $51,550 | | Operating loss | $(89,833) | $(83,833) | | Net loss | $(94,621) | $(91,641) | | Basic and diluted net loss per share | $(0.80) | $(0.89) | Consolidated Statement of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(105,161) | $(128,281) | | Net cash used in investing activities | $(101,407) | $(1,181) | | Net cash provided by financing activities | $6,459 | $6,703 | | Net decrease in cash and cash equivalents | $(201,078) | $(123,005) | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2022 financial performance, highlighting a 32.1% increase in ARIKAYCE net product revenues and rising R&D expenses for clinical trials - The company's first commercial product, ARIKAYCE, is approved in the US, Europe, and Japan for treating MAC lung disease, with a clinical-stage pipeline including brensocatib and TPIP[127][128][129] Product Revenues, Net by Geography (in thousands) | Geography | Q1 2022 | Q1 2021 | Increase (decrease) $ | Increase (decrease) % | | :--- | :--- | :--- | :--- | :--- | | US | $40,782 | $37,254 | $3,528 | 9.5% | | Japan | $10,676 | $— | $10,676 | NA | | Europe and rest of world | $1,649 | $2,960 | $(1,311) | (44.3)% | | Total | $53,107 | $40,214 | $12,893 | 32.1% | External R&D Expenses by Product (in thousands) | Product | Q1 2022 | Q1 2021 | Increase (decrease) $ | Increase (decrease) % | | :--- | :--- | :--- | :--- | :--- | | ARIKAYCE | $16,678 | $14,640 | $2,038 | 13.9% | | Brensocatib | $21,726 | $9,597 | $12,129 | 126.4% | | Other | $10,066 | $10,304 | $(238) | (2.3)% | | Total | $48,470 | $34,541 | $13,929 | 40.3% | - R&D expenses are expected to increase in 2022 due to ongoing clinical trials for brensocatib (Phase 3 ASPEN), ARIKAYCE (confirmatory ARISE and ENCORE), and TPIP[180] - As of March 31, 2022, cash and cash equivalents totaled $515.7 million, with marketable securities at $149.0 million, primarily decreasing due to marketable securities purchases and operating activities[190] Quantitative and Qualitative Disclosures about Market Risk Market risk exposure primarily relates to fixed-rate convertible notes and foreign currency fluctuations, neither of which has materially impacted financial results - The company holds $800.0 million in fixed-rate convertible notes (1.75% for 2025 Notes, 0.75% for 2028 Notes), minimizing exposure to interest rate fluctuations[198] - The majority of business is conducted in US dollars, with some exposure to Euros, British Pounds, and Japanese Yen, though historically, foreign currency fluctuations have not had a material impact on financial results[199] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2022, the company's disclosure controls and procedures were effective[200] - No changes occurred in internal control over financial reporting during the first quarter of 2022 that have materially affected, or are reasonably likely to materially affect, these controls[201] PART II. OTHER INFORMATION Legal Proceedings The company is involved in various legal proceedings, but management does not anticipate a material adverse effect on its financial condition or operations - The company states that it is party to various legal proceedings arising in the ordinary course of business but does not expect them to have a material adverse effect on its financial condition[203] Risk Factors Investors are directed to the Annual Report on Form 10-K for a comprehensive review of risk factors that could materially affect the company - The report refers to the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2021, for a comprehensive understanding of the risks and uncertainties facing the business[204] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the period - None reported[205] Other Information No other information was reported for the period - None reported[206] Exhibits This section provides an index of exhibits filed with the Form 10-Q, including employment agreements and required certifications - Lists various exhibits filed with the report, including amended employment agreements for executives and required SEC certifications[209]