Why Insmed Incorporated Shares Spiked Higher

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Insmed , a clinical-stage biopharmaceutical company focused on developing inhaled therapies to treat lung diseases, rocketed higher by as much as 16% after announcing positive open label data from a mid-stage study involving lead experimental compound Arikayce for treatment-resistant nontuberculous mycobacterial (NTM) lung infections.

So what: According to Insmed's early afternoon release, which caused quite the spike in its share price and was presented via a poster at the American Thoracic Society's annual meeting in San Diego, Calif., of the 78 patients that agreed to receive once-daily Arikayce plus the standard care of treatment for an additional 84 days (following a previous 12 weeks of treatment), 21 of those patients were NTM-negative by day 168. As Insmed points out, 10 of these patients were culture negative at day 84, as well as five Arikayce patients and six placebo patients that switched to Arikayce during the open-label trial. Based on this data Insmed plans to discuss with the Food and Drug Administration its next development steps, although it applied for the breakthrough therapy designation last month.


Now what: Keep in mind that this is the same stock that tumbled just two months ago after reporting that Arikayce met a number of key secondary endpoints in a mid-stage study involving NTM lung infections, but that missed its primary endpoint due to a high p-value (a measure that determines how much chance rather the medication could have factored into the results). On one hand we're seeing a clearly positive trend toward more negative cultures in the Arikayce arm compared to the placebo. On the other, a higher number of adverse events than the placebo and missing its primary endpoint has to give investors cause for concern. I'm personally continuing to monitor Arikayce's development, but I'm doing it from the sidelines and would suggest investors do the same. There's no guarantee it receives breakthrough therapy status or that its secondary endpoints can carry it to an approval. It would be great for treatment-resistant NTM patients if it worked out and they received a new treatment option, but I'm still seeing too much conflicting data to put my support behind this mid-stage investigational drug as of yet.

Insmed may have soared today, but it'll likely struggle to keep pace with this top stock over the long run 
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

The article Why Insmed Incorporated Shares Spiked Higher originally appeared on Fool.com.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Cops Catch Up To A Suspicious Speeding Vehicle - And Make An Appalling Discovery Inside Cops Catch Up To A Suspicious Speeding Vehicle - And Make An Appalling Discovery Inside
Don't Get Too Close To a Newborn Giraffe Unless You Want to Get Kicked in the Nuts Don't Get Too Close To a Newborn Giraffe Unless You Want to Get Kicked in the Nuts
If You Find One Of These In Your Yard, Don't Touch It - And Try Not To Panic If You Find One Of These In Your Yard, Don't Touch It - And Try Not To Panic