Insmed Stock (INSM) Sinks 18% as Analysts Cut Targets after Trial Failure — What's Next?

Shares in Insmed (INSM), the New Jersey-based pharma company, plummeted by as much as 18.4% to $161.92 on Thursday. This came as Wall Street analysts trimmed their price targets on INSM stock after the failure of the Phase 2b BiRCh trial.Claim 50% Off TipRanks Premium and Invest with Confidence Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential What Did the Study Entail? On Wednesday, Insmed shut down the mid-stage trial for CRSsNP after the study failed to show either the targeted main improvements/endpoints or possible extra gains from the use of the drug brensocatib. CRSsNP refers to chronic rhinosinusitis without nasal polyps, a condition in which patients without any small non-cancerous growths in their nasal passages suffer long-lasting sinus inflammation. Insmed engaged 288 participants across more than 100 sites worldwide for the study. What Are Analysts Saying on Wall Street? While analysts pointed to the study's failure for their price target cuts, they generally remain upbeat about Insmed. This is even as their new targets still imply significant upside from INSM's closing price on Wednesday. According to BofA analyst Jason Zemansky, the selloff in INSM stock was "overdone" and expectations from the failed study did not inform BofA's previous bullish case on Insmed. Going further, H.C. Wainwright analyst Andrew Fein contended that the failure will have a limited impact on other candidates on Insmed's drug portfolio. Both analysts lowered their price targets by about 4% and 5% to $203 and $240, implying more than 21% and 37% upside, respectively. What Other Trials and Updates to Monitor? Also chipping in, both TD Cowen analyst Ritu Baral and Goldman Sachs' Andrea Newkirk expressed an overall upbeat mood on INSM. Baral noted that she sees continued upside from Insmed's commercial launch of brensocatib for the treatment of non‑cystic fibrosis bronchiectasis (NCFBE), a chronic lung disease. She also sees gains from Insmed's Phase 3 trials to treat several forms of pulmonary hypertension and fibrotic lung disease (scarring of the lung tissue) using the treprostinil palmitil inhalation powder. On his part, Newkirk noted that investors' attention will turn to the rollout of Brinsupri for the treatment of the lung disease bronchiectasis. They will also watch for other events such as the company's upcoming fourth-quarter earnings results, and new regulatory approvals from the European watchdog. Is Insmed a Good Stock to Buy? Across Wall Street, Insmed's shares continue to carry a Strong Buy consensus rating. This is based on 17 Buys and one Hold issued over the last three months. In addition, the average INSM price target of $219.56 implies more than a 31% upside from current trading levels.