Mr. Young: Insmed is a biotechnology company that's focused on modulating and regulating the IGF-1 (Insulin-like Growth Factor-1) pathway. We have development programs focused on endocrine metabolic diseases, as well as two early-stage oncology programs also focused on the IGF-1 Pathway. Insmed got its start a dozen years ago as a spinout of some technology from the University of Virginia. Over the years, the company has grown and, through acquisitions, we acquired a product that fits our strategy. The product is called IPLEX, which is IGF-1/BP-3 complex. In humans, circulation IGF-1 circulates greater than 98% of the time bound to a second protein, BP-3. Through scientific discovery, we have learned that the BP-3 regulates the availability of IGF-1 and can potentially help mitigate some of the side effects seen with excessive free IGF-1 in circulation. In addition, BP-3 acts to prolong the circulating half-life of IGF-1 conferring a beneficial PK profile. The FDA received our NDA for IPLEX for our first indication in January 2005. The indication is severe primary IGF-1 deficiency. This is for children who are extremely short and who have adequate growth hormone levels, but where there is a signaling defect, or insufficient IGF-1 is produced as a result of growth hormone signaling. Generally, these children can be expected not to respond to human growth hormone. After the NDA was filed, we received approval on December 12, 2005. At that point, the company began the transition from a research and discovery company to a fully integrated company with research, discovery, manufacturing and commercialization. The week of May 23, Insmed announced that we had officially launched IPLEX in the United States. We assembled our own sales, marketing, managed care, medical affairs, and medical communication teams internally. We have partnered with the appropriate distributors and home healthcare pharmacies around the United States, and we have dosed our first patients with commercial drug. It's a major milestone for the company because Insmed's first product, IPLEX, was approved just five months prior to launch and we didn't waste any time on extensive preparations. As we move forward, we believe that the short stature market presents a significant market opportunity for the company. The initial indication, which is severe primary IGF-1 deficiency, has a patient population estimated at 5,000 to 7,000 children in the United States. These are children, once again, who can't be expected to respond adequately to growth hormone and, in fact, have adequate levels of growth hormone endogenously. We began potential label expansion studies in a variety of diseases during the last year, and will initiate another short stature study in a condition of IGF-1 deficiency associated with a syndrome called Noonan Syndrome. Noonan Syndrome affects about one in every 2,500 live births in the United States, and a similar number in Europe. This syndrome is characterized by patients being short, with a genetic anomaly or abnormality that may be identified through genetic screening. In fact, half the patients with Noonan Syndrome have a very defined defect on the growth hormone receptor. And so we can clearly identify that these patients are growth hormone resistant or growth hormone insensitive and IGF-deficient. As mentioned, we hope to start that study in the second quarter and have data available for the market early next year in 2007. Over and above the stature market, we believe IPLEX has multiple market opportunities, and that it has a wide range of therapeutic benefits for various patient types. We currently have several ongoing Phase II programs. Shortly, data will be reported at The Endocrine Society Meeting in Boston that focuses on severe insulin resistance. This is a most severe form of diabetes, if you will. It is a genetically acquired form of severe diabetes where patients are uncontrolled by insulin ' patients are uncontrolled by oral diabetic medicines and their glucose is generally out of control. That patient population has an ongoing cascade of negative outcomes, from circulatory problems to vision problems to cardiovascular problems. In our short-term clinical program, we've been able to show that IPLEX can have a positive impact on these patients by reducing A1c levels, by reducing glucose, by reducing insulin requirements, and by helping to normalize the patient's metabolism. In addition, we have treated several young patients or babies who were born without insulin receptors. These patients are normally expected to die within six to nine months of birth. On IPLEX therapy the patients are doing well. The children are growing normally, their HBA1c's are normal, their glucoses are normal, and, more important, we have helped modulate and regulate their endocrine and metabolic system so that they are developing as normal children. One patient is just over three years old, has been on treatment for two-and-a-half years, and is thriving. Without IPLEX, the patient would not have been expected to live beyond nine months of age. We are very excited about the opportunity to have such a positive impact on the patient and her family. Longer term, we are looking at opportunities in the potential application to a larger market for severe diabetes. In addition to the severe insulin resistance, we have studies ongoing in two other very exciting indications. The first is in myotonic muscular dystrophy. This is the most common form of adult onset muscular dystrophy. It affects about 40,000 patients in the United States, and an equal number in Europe. We've initiated a Phase II program with the University of Rochester through a grant from the NIH and the Muscular Dystrophy Association. We will be treating patients with myotonic muscular dystrophy, looking at the metabolic impact of IPLEX and the improvement in muscle strength and muscle measurements and metabolic function. Also, we're looking at the changes and impact the drug has on the patients' endocrine system, looking at the effect it has on the normalization of the insulin resistance that these patients manifest. We hope the data from the myotonic muscular dystrophy study will be available late this year or in 2007. In addition to the myotonic dystrophy, we have an ongoing study at the University of California in San Francisco in patients with AIDS Lipodystrophy or HARS, which is HIV- associated Adipose Redistribution Syndrome. These patients are generally on multiple therapeutic treatments for their HIV infections. It's believed that protease inhibitors cause a syndrome where patients begin to waste. Their arms and legs lose muscle tone, muscle mass and strength, and they have an abnormal development of fat around the central core organs of the body and, over time, they develop a significant fat deposit on the back of the neck. It's identified as a buffalo hump that causes very severe pain with a pressure on the spinal column. In addition, about half of these patients have abnormal glucose metabolism. There are approximately 180,000 of these patients in the United States, and the number is growing every year as the longevity of patients infected with HIV is increasing. It's estimated that half of these patients have glucose intolerance, and, therefore, they would not be eligible for treatment with the other product being studied, which is a human growth hormone. As I discussed earlier, growth hormone should cause the production of IGF-1, but growth hormone can also exacerbate glucose intolerance, and half of the HIV patients with lipodystrophy have glucose intolerance. So immediately, half of the patient population may not be eligible for growth hormone therapy for fear of worsening their glucose metabolism. We believe that our product not only may reduce or decrease the fat deposits around the organs, but it also will help increase the strength and integrity of the limbs. It may reverse any glucose intolerance as well. That data should be available in the fourth quarter of 2006. We have a very active clinical development program, looking at multiple indications well beyond a short stature. We are excited about the stature indication of severe primary IGF deficiency, as well as Noonan Syndrome. The growth and development of Insmed and of IPLEX really is unlimited because we have so many therapeutic opportunities. Beyond the aforementioned studies, we have data in diabetes patients and severe burn patients and osteoporosis patients, all showing very positive impacts of the drug in these different conditions. As we move into 2007, we will be working to identify which indication will be the best for us to pursue as far as the next label expansion for IPLEX. What are we doing to address the European market? Since the FDA approved the product, we made the decision to file our own application with the EMEA, and our goal has been to file it in Q3 of this year, and we are on target for that. Once we have the application on file and accepted by the EMEA, we will make the decision on commercialization. We have discussions with potential partners ongoing, but we also are evaluating the opportunity to commercialize the product ourselves in the European market. In terms of markets outside of the US and Europe, we have discussions going with potential partners, and we will make those decisions at the appropriate time.
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