Truist views successful ENCORE readout as win for Insmed

Truist analyst Danielle Brill notes Insmed (INSM) announced that the Phase 3 ENCORE trial of Arikayce in newly diagnosed MAC lung disease was successful. The firm believes the data is sufficient for both conversion to full approval for refractory MAC and full approval for all MAC LD. While Truist needs to “sharpen our pencils” to understand the potential impact of label expansion to the front-line setting on Arikayce’s sales trajectory, its current base assumption is that sales growth rate will remain stable. In prior conversations with prescribers, they expressed skepticism toward broad/ early line utilization of Arikayce for MAC even with successful label expansion. As such, it is unclear whether the data will broadly alter current treatment algorithms. Regardless, the firm views the successful ENCORE readout as a win for Insmed, especially considering any acceleration in Arikayce sales growth represents upside to its model. Truist has a Buy rating on the shares with a price target of $205.