Insmed (INSM) unusual action this week as 4000 November $30 calls were bought to open for $550K, a name lacking any other real notable open interest. INSM shares are -2.5% YTD and recently broke through an 18-month downtrend and consolidating below a key $28.60 resistance level. Shares are also sitting just above VWAP off the highs and just under a 38.2% retracement level with the longer term falling wedge pattern breakout pausing the last three weeks. INSM focuses on rare diseases with a pipeline of products across lung disease, cystic fibrosis, and PAH. The company has one approved treatment, ARIKAYCE, for the treatment of refractory MAC lung disease. The drug is a novel, inhaled, once-daily formulation of liposomal amikacin taken with a nebulizer. INSM sees a clear path to global expansion with large patient populations in both the EU and Asia and expects as COVID stabilizes, uptake with improve.

INSM has a market cap of $3.25B and trades 13.5X Sales with revenues seen rising to above $1B in 2026 with consistent strong topline growth. Analysts see peak Arikayce global sales of $3.1B. INSM’s two lead assets, Arikayce in both approved refractory MAC NTM as well as 1L MAC NTM (supportive Ph3 ENCORE data in 2025 could pave the way for an expanded label in 2026, representing a ~2.5x larger commercial opportunity) and brensocatib in non-CF bronchiectasis (Ph3 ASPEN data in 2024 with a potential 2025 launch), the sum of which translates to peak global sales of $6.3B in 2034. Ph2 brensocatib in cystic fibrosis (CF) and Ph2a TPIP right heart catheterization in pulmonary arterial hypertension (PAH) are two key upcoming catalysts to unlock pipeline value. INSM’s fourth pillar dedicated to translational medicine will be unveiled at the upcoming R&D day in 2H22 where the goal of 1 IND/year (first one in gene therapy by YE22) is designed to deliver long-term growth across multiple indications. INSM reported its strongest quarter to date with a 2Q top- and bottom-line beat. Global Arikayce sales in refractory NTM beat estimates. The company ended the quarter with $565M in cash/equivalents, which should fund operations into 2024. On the pipeline, there is emerging evidence, albeit from a single PAH patient treated in the Ph2a 24-hour right heart catheterization study, of TPIP’s differentiated and best-in-class profile, which now places increased emphasis on the ongoing Ph2b PAH and Ph2 PH-ILD studies, the latter of which could have data by YE23.

Analysts have an average target of $49 with short interest at 8% of the float. Goldman started at Buy in April with a $56 target. INSM could make for an attractive Biotech M&A target giving a commercial franchise with accelerating growth and upside pipeline optionality.