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Insmed Drug Wins Approval; Growth-Hormone Medicine Could Help the Henrico Firm Expand Its Product Line

Posted on: Wednesday, 14 December 2005, 06:00 CST

By Jeffrey Kelley; Contact staff writer Jeffrey Kelley at jkelley@timesdispatch.com or (804) 649-6348.

Insmed Inc. said yesterday evening that federal regulators have approved its drug iPlex, propelling the Henrico County firm into a small but competitive marketplace.

The Food and Drug Administration also granted Insmed "orphan- drug" status on iPlex, used to treat children with a growth-hormone deficiency. An approved competing drug has the same status, which gives a company seven years of marketing exclusivity for drugs that treat rare diseases.

At 7:30 last night, Insmed's stock was trading at $2.32, up 55.7 percent from the day's close.

"Today marks the beginning of a new treatment paradigm for treating children with [short stature] . . . This is also an exciting transition for Insmed," Geoffrey Allan, president and chief executive of Insmed, said in a statement. iPlex is expected to launch in the second quarter next year, the company said.

Mark A. Herzog, executive director of the Virginia Biotechnology Association, and Robert T. Skunda, president and chief executive of the Virginia BioTechnology Research Park, praised the Insmed approval yesterday as a step forward for the state biotechnology arena.

Insmed is the first alumnus of the 10-year-old park to win approval of a drug, they said.

The company was founded in 1988 in Charlottesville, moved to the biotechnology park in Richmond in 1996, and relocated to Innsbrook Corporate Center in 2001.

Like many biotech firms, Insmed went for years without a commercial product and a consistent revenue stream. The firm has spent millions of dollars in product development, which has translated into regular quarterly net losses.

The firm is fighting lawsuits with its chief rival, Brisbane, Calif.-based Tercica Inc. Tercica has developed a similar drug, which also has orphan drug status, and which Insmed claims is unsafe for use. Tercica, however, says otherwise and cites the FDA approval it got on the drug in August.

Tercica demanded last week that Insmed clarify statements it has made about the competing drug, Increlex. A lawsuit demands Insmed pay any profits it has received because of the allegations. Insmed said it will defend its position and right to inform investors about its activities.

Last year, a patent-infringement lawsuit was filed against Insmed by Tercica, saying the local firm is using exclusive rights the California company already holds.

Outside of legal challenges, Skunda said, Insmed faces the task of broadening its product line so revenue is not reliant on just one drug. Tercica's and Insmed's drugs extend into other metabolic and endocrine-related disorders, which could boost profits.

Insmed also has a "ticking clock of patent expiration," Skunda said, after which generic products can enter the market.

"It's a challenging industry," Skunda said. "There's no two ways about it."

Insmed shares closed up 3 cents at $1.49 yesterday on the Nasdaq exchange. Tercica shares, also on Nasdaq, fell 5 cents to $9.90.

Insmed will hold a conference call today to discuss the approval.

Source: Richmond Times - Dispatch

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