Insmed Inc. Reports Financial Results for Fourth Quarter and Twelve Months



    RICHMOND, VA., March 15 /CNW/ - Insmed Incorporated (NASDAQ:   INSM), a
biopharmaceutical company focused on the development and commercialization of
drug candidates for the treatment of metabolic diseases and endocrine
disorders with unmet medical needs, today announced results for the three and
twelve month periods ended December 31, 2006.

    Total revenues for the three months ended December 31, 2006 were $502,000
compared with $24,000 in the corresponding period of 2005. The net loss for
the fourth quarter of 2006 was $21.4 million or $0.21 per share, compared to a
net loss of $12.9 million or $0.27 per share for the fourth quarter of 2005.

    Total expenses for the fourth quarter of 2006 were $21.9 million,
compared to $7.1 million for the corresponding quarter of 2005, due primarily
to increases in commercial operations, litigation expenses and a $7.1 million
asset impairment charge resulting from the expensing of certain capital
equipment and inventory.

    Total revenues for the full year 2006 were $1.0 million, made up of $0.4
million from commercial sales, $0.4 million in cost recovery from the Expanded
Access Program and $0.2 million in royalty. This compares with $0.1 million in
royalties for the full year 2005. The net loss for all of 2006 was $56.1
million or $0.59 per share, compared to $40.9 million and $0.84 per share for
2005.

    Total expenses for the year ended December 31, 2006 were $55.4 million,
compared to $27.6 million for 2005, due primarily to increased commercial and
litigation expenses coupled with the asset impairment charge.

    As of December 31, 2006, the Company had total cash and cash equivalents
of $24.1 million, which represents an increase of $5.3 million from December
31, 2005. This net increase was due to $52.5 million in net cash provided by
financing activities during the year, partially offset by $47.2 million in net
cash used in operating and investing activities during the year. The $52.5
million in cash from financing activities was generated from a combination of
$42.8 million in net proceeds from the sale of common stock in March 2006,
$9.1 million from the exercise of certain outstanding warrants, $0.6 million
from a reduction in a restricted letter of credit and minor employee option
conversions.

    Looking ahead, in light of the recent settlement of litigation over
patent rights to Insmed's lead drug candidate, IPLEX, the Company expects to
refocus its development efforts in 2007 to concentrate on three areas which it
believes offer significant opportunities for IPLEX: HIV associated adipose
redistribution syndrome (HARS), Myotonic muscular dystrophy (MDD) And
Retinopathy of prematurity (ROP). The Company believes it has sufficient cash
on hand to fund operations into the fourth quarter of 2007.

    Conference Call

    The Company will host a conference call on Thursday, March 15th. 2007 at
4:30 p.m. Eastern Time to discuss the financial results for the fourth quarter
and full year of 2006 and provide a business update.

    Interested investors can listen to the call over the internet from
Insmed's investor relations website at www.insmed.com or by dialling (877)
407-0782 (domestic) or (201) 689-8567 (international).

    A telephonic replay of the call will be available for two weeks at
(877)-660-6853 (domestic) or (201) 612-7415 (international). The account code
is 286: the conference number is 234775. A web replay of the call will be
available for two weeks through our corporate website, in the investor
relations segment, beginning at 6:00 p.m.

    About Insmed Incorporated

    Insmed is a biopharmaceutical company focused on the development and
commercialization of drug candidates for the treatment of metabolic diseases
and endocrine disorders with unmet medical needs. For more information, please
visit www.insmed.com.

    Statements included within this press release, which are not historical
in nature, may constitute forward-looking statements for purposes of the safe
harbor provided by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements in this press release include, but are not limited
to, statements regarding planned clinical trial design, our regulatory and
business strategies, plans and objectives of management and growth
opportunities for existing or proposed products. Such forward-looking
statements are subject to numerous risks and uncertainties, including risks
that product candidates may fail in the clinic or may not be successfully
marketed or manufactured, the company may lack financial resources to complete
development of product candidates, the FDA may interpret the results of our
studies differently than we have, competing products may be more successful,
demand for new pharmaceutical products may decrease, the biopharmaceutical
industry may experience negative market trends and other risks detailed from
time to time in the company's filings with the Securities and Exchange
Commission. As a result of these and other risks and uncertainties, actual
results may differ materially from those described in this press release. For
further information with respect to factors that could cause actual results to
differ from expectations, reference is made to reports filed by the Company
with the Securities and Exchange Commission under the Securities Exchange Act
of 1934, as amended. The forward-looking statements made in this release are
made only as of the date hereof and Insmed disclaims any intention or
responsibility for updating predictions or financial guidance contained in
this release.

    
                             INSMED INCORPORATED
                    Condensed Consolidated Balance Sheets
               (in thousands, except share and per share data)

                                                      Dec. 31,   Dec. 31,
                                                       2006       2005
                                                     ---------- ----------

    Assets
    Current assets:
      Cash and cash equivalents                      $  24,112  $  18,835
      Restricted cash                                      407        285
      Accounts receivable, net                             241          -
      Inventories                                          576          -
      Other current assets                                  87         83
                                                     ---------- ----------
      Total current assets                              25,423     19,203

    Long-term assets:
      Restricted cash - long term                        2,708      3,118
      Deferred financing costs, net                        209        532
      Property and equipment, net                            8         17
                                                     ---------- ----------
      Total long-term assets                             2,925      3,667
                                                     ---------- ----------

    Total assets                                     $  28,348  $  22,870
                                                     ---------- ----------

    Liabilities and stockholders' equity
    Current liabilities:
      Accounts payable                               $   7,187  $     968
      Accrued project costs & other                      1,115      1,990
      Payroll liabilities                                1,302      1,574
      Interest payable                                      23         52
      Deferred rent                                         54        286
                                                     ---------- ----------
      Total current liabilities                          9,681      4,870

    Long-term liabilities:
      Convertible debt                                   5,125     11,438
      Debt discount                                     (1,964)    (5,001)
                                                     ---------- ----------
         Net convertible debt                            3,161      6,437

      Asset retirement obligation                        1,626      1,034
                                                     ---------------------

    Total liabilities                                   14,468     12,341
                                                     ---------- ----------

    Stockholders' equity:
      Common stock; $.01 par value; authorized
       shares
      500,000,000; issued and outstanding shares,
      101,328,118 in 2006 and 66,525,792 in 2005         1,013        665
      Additional paid-in capital                       323,664    264,522
      Accumulated deficit                             (310,797)  (254,658)
                                                     ---------- ----------
      Net stockholders' equity                          13,880     10,529
                                                     ---------- ----------

    Total liabilities and stockholders' equity       $  28,348  $  22,870
                                                     ---------- ----------
    

    
                             INSMED INCORPORATED
               Condensed Consolidated Statements of Operations
              (in thousands, except per share data - unaudited)

                                         Three Months     Twelve Months
                                             Ended             Ended
                                           Dec. 31           Dec. 31
                                      ------------------------------------
                                        2006     2005     2006     2005
                                      ------------------------------------

    Sales                             $    452 $      - $    834 $      -
    Royalties                               50       24      157      131
                                      ------------------------------------
      Total revenues                       502       24      991      131

    Operating expenses:
    Cost of goods sold                     836        -    1,490        -
    Asset impairment                     7,103        -    7,103        -
    Research and development             4,251    5,481   21,089   21,835
    Selling, general and
     administrative                      9,716    1,607   25,682    5,730
                                      ------------------------------------
      Total expenses                    21,906    7,088   55,364   27,565
                                      ------------------------------------

    Operating loss                     (21,404)  (7,064) (54,373) (27,434)

    Interest income                        528      200    1,937      752
    Interest expense                      (552)  (6,021)  (3,703) (14,247)
                                      ------------------------------------

    Net loss                          $(21,428)$(12,885)$(56,139)$(40,929)
                                      ------------------------------------

    Basic and diluted net loss per
     share                            $  (0.21)$  (0.27)$  (0.59)$  (0.84)
                                      ------------------------------------

    Shares used in computing basic and
     diluted net loss per share        100,634   47,340   95,321   48,742
                                      ------------------------------------
    

    
                             INSMED INCORPORATED
               Condensed Consolidated Statements of Cash Flows
                          (in thousands - unaudited)
                                                            Year Ended
                                                             Dec. 31
                                                         2006      2005
                                                       --------- ---------
    Operating activities
    Net loss                                           $(56,139) $(40,929)
    Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization                        3,369    12,897
     Non-cash stock acceleration                                       15
     Stock based compensation expense                       885         -
     Stock options issued for services                       79        33
     Impairment of property, plant and equipment          5,020
     Changes in operating assets and liabilities:
       Accounts receivable                                 (241)        -
       Inventories                                         (576)        -
       Other assets                                          (4)       91
       Accounts payable                                   6,219    (1,653)
       Accrued project costs and other                     (875)    1,106
       Payroll liabilities                                 (272)      391
       Deferred Rent                                       (232)     (359)
       Asset retirement obligation                          592       591
       Interest payable                                     (29)       52
                                                       --------- ---------
    Net cash used in operating activities               (42,204)  (27,765)
                                                       --------- ---------

    Investing activities
       Purchases of property, plant and equipment        (5,020)        -
                                                       --------- ---------
    Net cash provided by investing activities            (5,020)        -
                                                       --------- ---------


    Financing activities
    Proceeds from issuance of convertible debt with
     detachable stock warrants                                -    35,000
    Proceeds from issuance of common stock
     Public offering - issuance of 23 million shares     43,240         -
     Issuance costs                                        (421)        -
     Warrants converted into shares                       9,069         -
     Other                                                  325     4,621
                                                       --------- ---------
    Total proceeds from issuance of common stock         52,213    39,621
    Costs incurred in conjunction with issuance of
     debt                                                     -    (2,428)
    Cash restricted to restricted letters of credit         288       185
                                                       --------- ---------
    Net cash provided by financing activities            52,501    37,378
                                                       --------- ---------

    Increase in cash and cash equivalents                 5,277     9,613
    Cash and cash equivalents at beginning of year       18,835     9,222
                                                       --------- ---------

    Cash and cash equivalents at end of year           $ 24,112  $ 18,835
                                                       --------- ---------

    Supplemental information
     Cash paid for interest                            $    319  $  1,104
    




For further information:

For further information: Investor Relations International Haris Tajyar,
818-382-9702 htajyar@irintl.com

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