Little-known Insmed could take off as one of its drugs with conditional approval and another in development show promise, according to Barclays. Analyst Leon Wang initiated the stock as overweight with a price target of $37, which represents 94.9% upside from Wednesday’s close, according to Barclays. The company focuses on pulmonology-focused commercial biotech, with two major medications for bronchiectasis, which is when airways in lungs are widened, and a lung disease. Data from the third phase of the bronchiectasis medication’s trial coming in the second quarter of 2024 is viewed as the primary value-unlocking event going forward. The in-progress drug is officially called P3 brensocatib. Its Phase 2 study showed statistically significantly benefits, but the third phase is expected to de-risk evidence, reflect input from regulators and help address compounding factors seen in the previous phase. Wang is hopeful it quells some concerns over prior data’s dose responsiveness with a larger sample size. “Positive data in ASPEN would likely support approval, opening up a multibillion dollar product opportunity, based on our model, in an attractive therapeutic area (Pulmonology/Respiratory) with limited competition,” he said, referring to ASPEM, which is the name of the third phase. He said there’s a high risk-reward ratio given the drug’s potential addressable market. Assuming strong data out of the third trial, Wang said the medication could hit the market in 2025. Meanwhile, the medication for refractory MAC lung disease, called Arikayce, could have a sales momentum opportunity with Covid headwinds easing and it becoming more widely utilized. Wang said Insmed’s medication is far ahead of competitors in development. Wang said the medication is underappreciated because of the lack of competition and the potential to expand its addressable market by four times. He also said there is a low risk of the Food and Drug Administration rescinding conditional approval. He said Insmed will likely surpass sales guidance, which was already set for a 30% year-over-year increase, in 2022. — CNBC’s Michael Bloom contributed to this report.
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