Insmed Incorporated (NASDAQ:INSM) Phase-2 Results Confuses Market

Posted by admin March 31, 2014 0 Comment 1512 views

Insmed Incorporated (NASDAQ:INSM) reported updates from its phase 2 clinical trials of its target drug designed to treat lung infection on 26h March after market close. When markets resumed trading on 27th March, the investor community seemed to be a confused lot. This was because they seemed to be unable to make up their mind if the phased 2 trials data represented a positive or a negative on the development stage drug makers outlook.

First Impressions Were Negative

When trading began on 27th March, the investors exited the stock of Insmed Incorporated (NASDAQ:INSM) in droves in the first session as most of them were spooked by the company’s bland statement which announced that the trail results did not meet the goals that the scientists had set before trial initiation.

Silver Lining

 The announcement went on to also claim that the results were significantly better than other marketable drugs and displayed a positive trend in bringing down the level off microbes in the patients over the duration of the treatment.   In the first part of the trading day, the stock shed close to 14 percent of it valuation as a result of sustained sell call on the stock.

Analysts Explanation Reversed Trends

Then in the second half of the trading session, things seemed to change course in the other direction after, analysts had time to drill into the company press release and determine that the clinical trial results were not in fact a setback, but contained portends of positive developments. Rating agency Leerink went on to raise the price target of the stock to a Price Target to $30 and indicated that the additional data related to culture conversions indicated a huge potential for the target drug under development. It went on to recommend a outperform rating on the stock. Piper Jaffray also followed up with its own positive take on the saying that the results were “much more meaningful and clinically relevant”. This helped the stock reverse its losses and post close to 7 percent gains by end of trading.

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