By Randall Osborne

West Coast Editor

With a deal signed this summer to develop its insulin sensitizer in Japan and Asia, and with plans to push its potential hormone replacement therapy, SomatoKine, toward market as well, Insmed Inc. intends to offer 4 million to 5 million shares of common stock in the fourth quarter of this year.

At Thursday's $19.50 opening of the Richmond, Va.-based company's shares (NASDAQ:INSM), the offering would raise between $78 million and $97.5 million. The stock closed at $19.437, down 6.25 cents.

"There's been quite a bit of activity with the stock - it's been going up," said Sophia Twaddell, spokeswoman for Insmed. "There've been some parties accumulating shares."

Having completed its acquisition of Celtrix Pharmaceuticals Inc., of Santa Clara, Calif., in late May, Insmed went public in June on Nasdaq's small-cap market, moving to the national Nasdaq after a reverse stock split in July.

Insmed officials "weren't looking to acquire a company, they were interested in SomatoKine," Twaddell said. Since the Celtrix deal, the management team has been busy establishing itself.

"They've done a good job of getting the story out," she said.

INS-1 Targets Type II Diabetes, PCOS

Insmed's lead product is INS-1, a naturally occurring, oral insulin sensitizer, for the treatment of Type II diabetes and polycystic ovary syndrome (PCOS). It's believed to be a component of a molecule that activates enzymes controlling glucose metabolism in insulin-resistant patients.

PCOS is the most common female endocrine disorder, affecting up to 6 percent of premenopausal women. In the U.S. and Japan, it is the leading cause of anovulatory infertility. Affected women often are overweight, with excess facial hair and menstrual irregularities - as well as increased risk of developing Type II diabetes, coronary artery disease and endometrial cancer.

INS-1 is being tested in Phase II trials.

In July, Insmed granted an exclusive license to Taisho Pharmaceutical Co. Ltd., of Tokyo, to develop and commercialize INS-1 in Japan and other Asian countries. The deal is worth up to $32 million. (See BioWorld Today, July 19, 2000, p. 1.)

SomatoKine is a recombinant equivalent of insulin-like growth factor-1 (IGF-1) and its major binding protein, BP-3. Insmed says the drug has shown promise as a hormone replacement therapy, stimulating the production of bone and muscle mass.

Last April, Celtrix and Dublin, Ireland-based Elan Corp. plc entered into a joint venture to develop SomatoKine for osteoporosis. Elan agreed to purchase up to $12.8 million in preferred Celtrix stock at a significant premium. (See BioWorld Today, April 14, 1999, p. 1.)

Now, Insmed and Elan are testing SomatoKine in a Phase II trial for functional recovery from osteoporotic hip fracture, Twaddell said.

"When these old ladies fall down and break their hips, about 70 percent never recover fully," she said. "Some of them die." Others require ambulatory support by walkers or canes.

Insmed by itself is evaluating SomatoKine in a Phase II trial for Type I diabetes.

In all, Twaddell said, there are "two drugs, four indications, and nine trials. And all the drugs are designed to be used in big markets, where there are big unmet needs." n

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