NEW YORK (AP) -- Shares of drug developer Insmed Inc. jumped Wednesday after a Lazard Capital Markets analyst started covering the stock, saying the shares could double in value over the next year.
THE SPARK: Analyst Joshua Schimmer started covering the stock with a "Buy" rating and a price target of $21 per share. He said sales of Insmed's lung disease drug Arikace could reach more than $600 million a year by 2020.
Arikace is a form of amikacin, a drug used to treat infections. Schimmer said Insmed's formulation of the drug appears to be safer and more effective than older versions, and it could also be given less frequently than those drugs.
THE BIG PICTURE: Insmed is based in Monmouth Falls, N.J., and it has no approved products. It is studying Arikace as a treatment for lung infections in cystic fibrosis patients and for infections caused by non-tuberculous mycobacteria, or NTM. In the next few months it plans to report results from a late-stage clinical trial involving cystic fibrosis patients. By the end of the year it expects to report data from a study evaluating the drug against non-tuberculous mycobacterial infections.
Schimmer said Arikace could be on the market in Europe in 2015, with U.S. marketing to follow in 2017. He said there are no approved treatments for NTM lung infections, and most of Arikace's sales could come in that indication.
SHARE ACTION: Insmed stock climbed $1.27, or 13.9 percent, to $10.41 in afternoon trading. Earlier the shares as high as $11.25, its highest level since July 2011. As of Tuesday's close the shares had climbed 37 percent in 2013, and they had nearly tripled in value since Sept. 1.
- Health Care Industry