Last Update07 Sep 25Fair value Increased 6.44%
Insmed’s consensus price target has increased to $158.00, reflecting analyst optimism around Brinsupri’s broad FDA approval, strong initial commercial outlook, advancing pipeline assets, and positive clinical data, despite some valuation concerns following the recent price appreciation.
Analyst Commentary
- Bullish analysts are raising price targets following the FDA approval of Brinsupri (brensocatib) for non-cystic fibrosis bronchiectasis, highlighting a broad label, no major safety warnings, inclusion of FEV1 efficacy data, and a high launch price as key upside surprises that position the therapy for multi-billion dollar opportunities.
- Multiple analysts point to Brinsupri's projected commercial strength in bronchiectasis and additional pipeline indications (e.g., chronic rhinosinusitis without nasal polyps, hidradenitis suppurativa), viewing the "pipeline-in-a-pill" strategy as a core driver of long-term valuation expansion.
- Recent positive Phase 2 pulmonary arterial hypertension (PAH) data for TPIP, demonstrating best-in-class efficacy with significant pulmonary vascular resistance reduction and six-minute walk distance improvement, have increased analyst estimates for peak revenues and market share.
- Bullish analysts view United Therapeutics' TETON-2 Tyvaso results in idiopathic pulmonary fibrosis as validating TPIP’s potential superior profile in IPF, expanding Insmed’s addressable market and improving likelihood of future approvals.
- Some bearish analysts have tempered enthusiasm, with valuation concerns raised as Insmed's recent gains may already reflect much of the anticipated commercial success, leading to downgrades or removal from top conviction lists.
What's in the News
- The FDA approved BRINSUPRI (brensocatib) as the first and only treatment for non-cystic fibrosis bronchiectasis (NCFB) in patients 12 years and older, with strong efficacy and safety data from Phase 2/3 trials; European and Japanese submissions are underway and US commercial distribution has commenced.
- Maxor Specialty Pharmacy was selected as a limited distribution provider for BRINSUPRI, expanding the drug’s specialty pharmacy reach.
- Insmed reiterated its 2025 global ARIKAYCE revenue guidance at $405 million to $425 million, reflecting double-digit growth over 2024.
- Insmed reported positive topline results from a Phase 2b study of treprostinil palmitil inhalation powder (TPIP) for pulmonary arterial hypertension, meeting all primary and secondary endpoints and advancing plans for a Phase 3 program.
- The company completed a $750 million follow-on equity offering and underwent extensive index rebalancing, with multiple additions to Russell Value and Growth indices and removals from certain Russell 2000 benchmarks; key lock-up periods for insider shares will end in August 2025.
Valuation Changes
Summary of Valuation Changes for Insmed
- The Consensus Analyst Price Target has risen from $148.44 to $158.00.
- The Net Profit Margin for Insmed has significantly risen from 8.97% to 10.90%.
- The Future P/E for Insmed has significantly fallen from 203.54x to 176.23x.
Key Takeaways
- Anticipated U.S. and international launches of brensocatib are key catalysts for significant revenue growth and new market penetration.
- Strategic investment in market access and R&D aims to sustain long-term profitability and support efficient product launches.
- Regulatory and payer challenges could delay brensocatib's U.S. launch and market uptake, potentially affecting Insmed's revenue projections and margin strategies.
Catalysts
About Insmed- Develops and commercializes therapies for patients with serious and rare diseases in the United States, Europe, Japan, and internationally.
- The anticipated U.S. launch of brensocatib in bronchiectasis in the third quarter of 2025 is a major catalyst, expected to significantly increase revenue once it hits the market and starts generating sales late in Q3.
- The upcoming Phase II data for TPIP in PAH by mid-2025 and brensocatib in CRS without nasal polyps by the end of 2025 are key clinical milestones that could enhance future revenue streams if positive.
- Potential label expansion for ARIKAYCE based on the Phase III ENCORE trial readout in Q1 2026 could address a larger patient population, leading to a substantial increase in revenue.
- Upcoming international launches of brensocatib in Europe, the U.K., and Japan by 2026 could open new markets, contributing to revenue growth.
- Strategic investment in enhanced market access and a strong commercial team is expected to support efficient launches and revenue growth, while cash on hand allows for continued investment in R&D, sustaining long-term profitability.
Insmed Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming Insmed's revenue will grow by 72.0% annually over the next 3 years.
- Analysts are not forecasting that Insmed will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Insmed's profit margin will increase from -251.2% to the average US Biotechs industry of 15.9% in 3 years.
- If Insmed's profit margin were to converge on the industry average, you could expect earnings to reach $293.8 million (and earnings per share of $1.32) by about May 2028, up from $-913.8 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $522 million in earnings, and the most bearish expecting $-510.0 million.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 88.9x on those 2028 earnings, up from -14.2x today. This future PE is greater than the current PE for the US Biotechs industry at 20.4x.
- Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 6.58%, as per the Simply Wall St company report.
Insmed Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- The potential delay in the FDA review process, especially if the agency decides to convene an advisory committee, could impact the timing of the U.S. launch of brensocatib, which in turn may affect revenue projections.
- Market access challenges, including the need for contracting and potential pushback from payers on reimbursement criteria for brensocatib, could lead to slower-than-expected uptake, impacting revenue and margin assumptions.
- The competitive landscape for treatments targeting CRS without nasal polyps and bronchiectasis, along with payer acceptance, could influence the pricing strategy and impact net margins.
- Continuation rates and adherence to TPIP and brensocatib in real-world settings may vary, which could impact the projected uptake and revenue generation in these therapeutic areas.
- External factors such as regulatory changes under the Inflation Reduction Act may alter gross-to-net revenue calculations, affecting Insmed's earnings and financial projections.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $97.124 for Insmed based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $110.0, and the most bearish reporting a price target of just $89.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.9 billion, earnings will come to $293.8 million, and it would be trading on a PE ratio of 88.9x, assuming you use a discount rate of 6.6%.
- Given the current share price of $71.4, the analyst price target of $97.12 is 26.5% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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