Insmed Incorporated (INSM) shares took a beating Thursday after the biotech company delivered disappointing news on one of its experimental drug programs, though Wall Street analysts say the bigger picture remains intact.
The culprit? Data from the Phase 2b BiRCh study of brensocatib in patients with chronic rhinosinusitis without nasal polyps, a condition that sounds complicated because it is. In short, it's chronic sinus disease without the polyps.
The trial missed on all fronts. Neither the 10 mg nor the 40 mg treatment arms hit their primary or secondary efficacy endpoints. When your drug can't beat placebo, that's generally a bad sign. Insmed responded swiftly, discontinuing the entire brensocatib development program for this indication effective immediately.
On the bright side, the drug was well tolerated with no new safety concerns, including at the 40 mg dose, which represents the highest amount Insmed has tested to date. But safety without efficacy doesn't move the needle for patients or investors.
"Given that there are no animal models in this disease, the purpose of this proof-of-concept study was to determine if brensocatib could provide treatment benefit to patients with CRSsNP," explained Insmed Medical Officer Martina Flammer, M.D., MBA. Translation: They were taking a shot in the dark, and it didn't work out.
The Numbers Tell the Story
The study measured change from baseline in the Sinus Total Symptom Score at Week 24, with lower numbers indicating improvement. The placebo group showed a least squares mean improvement of -2.44, while the 10 mg brensocatib group came in at -2.21 and the 40 mg group at -2.33. Neither treatment group meaningfully outperformed placebo.
But Wait, There's Good News
Before you write off Insmed entirely, remember that brensocatib already has FDA approval for a different indication. In August, the agency approved Brinsupri (brensocatib in 10 mg and 25 mg tablets) as an oral, once-daily treatment for non-cystic fibrosis bronchiectasis in adults and children 12 years and older. It's actually the first approved treatment for this type of chronic lung disease.
Insmed also announced Thursday that it acquired INS1148, an investigational monoclonal antibody targeting respiratory, immunological, and inflammatory diseases. The company plans to advance Phase 2 programs for this asset in interstitial lung disease and moderate-to-severe asthma. INS1148, formerly known as OpSCF, was developed by Opsidio, a private clinical-stage company.
What the Analysts Are Saying
Wall Street isn't panicking. William Blair acknowledged Thursday that "the BiRCh study always carried some clinical risk given the lack of previous data with DPP1 inhibition in CRSsNP and lack of numerous clinical datasets to understand potential placebo response rates."
Analyst Matt Phipps emphasized that even without the CRSsNP opportunity, Brinsupri will continue its strong launch in bronchiectasis, while the company's other lead programs, Arikayce and TPIP, offer meaningful expansion opportunities. William Blair reiterated its Outperform rating.
RBC Capital maintains an Outperform rating but lowered its price target from $215 to $195. Guggenheim kept its Buy rating while trimming its target from $230 to $221. Even with the haircuts, those targets suggest significant upside from current levels.
INSM Action: INSM stock dropped 15.28% to $168.14 at publication Thursday.
