Insmed stock catapulted Tuesday after the biotech company's experimental lung disease treatment succeeded in a final-phase study.
Now, Insmed is planning to ask the Food and Drug Administration to approve its drug, brensocatib, as a treatment for patients with non-cystic fibrosis bronchiectasis. In this chronic inflammatory lung disease, the airways can become permanently widened, leading to respiratory infections, a chronic cough and excessive sputum production.
There are no medications specifically approved to treat bronchiectasis. Patients most often receive antibiotics, steroids and inhalers. The results validate Insmed's theory that blocking an enzyme called DPP1 can help treat some inflammatory diseases.
Leerink Partners analyst Joseph Schwartz compared the market potential for Insmed's brensocatib to Regeneron Pharmaceuticals' and Sanofi's Dupixent and AbbVie's Humira. Dupixent, a treatment for asthma, eczema and other diseases, brought $11.6 billion in sales last year. Analysts expect it to top $21 billion in 2029 sales. At its peak in 2022, Humira generated $21.2 billion in sales from treating patients with immunological diseases.
"However, diagnosed NCFB may just be the tip of the iceberg, which could expand several-fold with a simple CT scan, potentially identifying more NCFB patients who are currently diagnosed with COPD (chronic obstructive pulmonary disease)," he said in a client note. "It might be too early to tell, but the opportunity with brensocatib reminds us of Regeneron's Dupixent and even AbbVie's Humira."
On today's stock market, Insmed stock skyrocketed 118.7% to 48.11. Shares hit a 23-year high.
Insmed Stock: 'Very Attractive' Market
Insmed tested two doses of brensocatib. The low dose led to a 21.1% reduction in the number of lung exacerbations, or flare-ups, a patient would be expected to experience in a year. At the high dose, patients had a 19.4% reduction in the annualized rate of pulmonary exacerbations.
"While some may wonder about the lack of dose response, we do not believe it is necessary," Leerink's Schwartz said.
Blocking DPP1 leads to lower levels of an inflammatory protease called neutrophil elastase. But the body could still require some of that protease for proper function. More dosing options will allow the doctors to tailor that level to each patient.
Side effects included Covid, inflammation of the nasal passages, cough and headache.
The market for non-cystic fibrosis bronchiectasis is "very attractive," Schwartz said. There are about 450,000 people with the disease in the U.S. and no approved treatments.
Arcturus Surges On Cystic Fibrosis News
In related news, Arcturus Therapeutics stock soared 23.1% to 37.42 on a positive update for its cystic fibrosis treatment.
Patients with cystic fibrosis have mutations in their CFTR gene. Arcturus uses an inhaled drug to deliver messenger RNA to patients' lungs. Messenger RNA, or mRNA, is responsible for making proteins. In the lungs, the mRNA from Arcturus' drug makes the correct version of the CFTR protein.
Four patients received two doses of Arcturus' drug over eight days. On average, they had a 4% improvement in how much air they could expel for one second — a key test of lung function in cystic fibrosis.
William Blair analyst Myles Minter noted that the results are encouraging, but questions remain. It will be important to know whether patients received Arcturus' drug on top of Vertex Pharmaceuticals' Trikafta. Trikafta is a standard treatment for cystic fibrosis.
"This is important as a 4% improvement over Trikafta would be impressive, in our view, given Vertex did not show superiority on (forced expiratory volume for one second) with its second-generation vanzacaftor triple over current Trikafta treatment, and an additional improvement of 4% could be meaningful," he said in a report.
He has an outperform rating on Arcturus stock, which bounded off its 50-day moving average on the news. Similarly, Insmed stock retook its 50-day line on its bronchiectasis treatment update, according to MarketSurge.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
