Tobin Smith On InsmedInsmed Incorporated (INSM) is a biopharmaceutical company focused on the discovery and development of drug candidates for the treatment of metabolic diseases and endocrine disorders. The company's approach is to correct metabolic defects in the human body by replacing key regulatory molecules in a physiologically relevant fashion. Insmed has two lead drug candidates, recombinant human (rh) IGF-I/rhIGFBP-3 (also known as SomatoKine), and rhIGFBP-3. Insmed is actively developing these drugs to treat indications in the metabolic and oncology fields.
Insmed's SomatoKine drug received orphan drug designation as a treatment for extreme insulin resistance. This is the first step to the FDA approval for ALL diabetes drugs -- that's the promised land.
Every biotech firm with a new single molecule drug facing a multibillion-dollar market in phase III trial is valued at over $1 billion - EXCEPT Insmed. With approval of their diabetes drug, we expect 8X - 10X valuation improvement.
We are tracking a variety of companies in the diabetes space, and Insmed is one of the most promising speculative names. The idea behind this pick is simple -- they own the intellectual property via patents for a type of hormone replacement therapy that has shown significant impact in controlling diabetes.
The market for hormone replacement therapies is huge, with growth hormones representing a billion-dollar market and insulin being a $2 billion-plus sector.
Insmed owns the "key" (via dominant patent position) to safely deliver an insulin-like growth factor-binding proteins. Management believes their compound called SomatoKine has a $1 billion annual market potential and could help diabetics reduce their use of insulin -- an exciting prospect for treatment of the disease. It has already been proven effective for diabetes, severe burns and osteoporosis. Those indications are just the tip of the iceberg.
This is a great legacy play -- buy under $3 on their third-stage diabetes molecule.
Remember our five-year horizon here--we have a $25-$30 stock if our intelligence is right on their diabetes and cancer drugs. This is the way you get rich on stocks like this, using the bottom of the trading range to nibble and then forget about the short term.