1. Insmed is cash-rich.

As of June 30 Insmed had total assets of $125,300,000 – 98% of which were cash and equivalents. With 129,433,000 shares outstanding, if the Company was liquidated tomorrow the cash alone would be worth 95 cents a share to its shareholders.

Total liabilities were $4,616,000, against the value of a patent portfolio which, going by the legal expense Genentech was prepared to incur a couple of years ago in defending its own intellectual property on IGFBP-3, would almost certainly be valued in the hundreds of millions. The oncology market is estimated to be worth $85 billion in the next few years, and IGFBP-3 has been established in a number of pre-clinical studies as a likely cancer therapy.

Insmed should generate positive earnings from current operations of around $12 million per annum for at least the next seven quarters - meaning that if they did absolutely nothing for the time being the cash hoard would just get larger. But now is the time to be making deals - and in Melvin Sharoky, Insmed has a Chairman with considerable expertise in that area.

Having all that cash at a time when investment capital is scarce has afforded Insmed an incredible bargaining opportunity with regard to companies which have outstanding late-stage drug candidates but are running low on cash. Insmed has already talked to a number of these companies, and is currently evaluating near-term commercial opportunities which have a strong IP and patent position. SemBioSys and Metabasis are typical examples of what is happening with many small bios at the moment - looking to cut deals to raise the odd two or three million dollars just to be able to stay in business.

There is a fairly comprehensive list of companies in Insmed’s space at the website below, which should demonstrate quite clearly just how advantageous is Insmed’s position –

http://www.financialchat.com/blogs/biote...

2. Insmed’s management are sharp cookies.

Insmed has reached a position of unbelievable strength despite suffering at least two potentially-catastrophic setbacks. Their first drug, INS-1, failed. They survived because they’d had the foresight to acquire Celtrix.

Insmed then lost a patent infringement case, resulting in Genentech and Tercica being gifted a stranglehold on the manufacture and use of Iplex in the U.S. until February 2011. Insmed reacted by converting their manufacturing facility to FOB production. Less than two years later they had sold the facility, for which they paid $3.6 million, to Merck, for $130 million.

3. Insmed has IP of truly unbelievable value.

Companies with IP on drugs with potential are a dime a dozen. The vast majority are destined to fail – running out of cash, and either folding or selling themselves to somebody bigger.

Insmed is different, because much of their IP covers the production and use of drugs which are copies of substances naturally occurring in the human body. The Genentech U.S. IGFBP-3 patent expires next November. The European equivalent expired in March this year. Insmed could form a commercialisation partnership for Iplex in Europe tomorrow if they can find an alternative method of administration to subcutaneous bolus injection. And delivery technology has moved on in the five years since Insmed started the FDA approval process.

But for the moment Insmed's primary focus is to use that cash to successfully negotiate this one final hurdle – to bring a new revenue stream on board which would guarantee that they will get to a place where they can unlock the extraordinary value of their patents. Imo those of you here who talk about a sale for $5 a share really shouldn't be allowed out on your own. Check out a few of these patents – what they cover, and when they expire -

http://messages.finance.yahoo.com/Stocks...