Dive Brief:

• A streak of positive news that pushed Insmed into the ranks of the most valuable biotechnology companies ended this week with the announcement of a failed clinical trial.
• The company’s share price dropped almost 17% to about $165 early Thursday, following the announcement late Wednesday. The stock, which was worth around $25 a year and a half ago, had vaulted above $200 in trading this week.
• The Phase 2b study focused on a drug called brensocatib, which Insmed already sells under the brand name Brinsupri to treat a lung disease known as non-cystic fibrosis bronchiectasis. The company had hoped to expand use of the medicine to include a chronic nasal condition, but researchers found no benefit for either of the two doses they tested.

Dive Insight:

The results reversed what had been a fairly steady climb for Insmed since it first reported promising results for brensocatib in bronchiectasis in May 2024. The company won approval for the drug in August 2025 and then beat analyst estimates for third-quarter sales. Meanwhile, Insmed reported more positive research in June for a different drug to treat patients with pulmonary arterial hypertension.

“The recent win streak breaking may somewhat change sentiment,” RBC Capital Markets analyst Leonid Timashev wrote in a note to clients. Even so, “we do not think this one setback should completely rewrite the narrative on the stock.”

Timashev expects Brinsupri to bring in sales of close to $700 million next year and is looking for continued success from the company’s other marketed product, Arikayce. Insmed also has the possibility of more good news with its pulmonary disease drug and is taking a “shot on goal” that may expand the use of brensocatib to include patients with the inflammatory disorder hidradenitis suppurativa, he wrote.

The hoped-for expansion in the latest study always carried risk, according to analysts. There are no animal models for the disease, known as chronic rhinosinusitis without nasal polyps, so the clinical trial was serving as a proof-of-concept test. “While we are disappointed in the results, they provided us with a clear answer,” Martina Flammer, Insmed’s chief medical officer, said in the company’s statement.

Insmed tempered the news with an announcement of a new acquisition for its pipeline. The monoclonal antibody, known as INS1148, is ready for Phase 2 research “to address respiratory and immunological and inflammatory diseases with high unmet need,” Insmed said. The company said it plans to initially test the medicine in interstitial lung disease and moderate-to-severe asthma.

While the company didn’t disclose details about the acquisition, analysts said Insmed paid $40 million up front to the drug’s developer, a private company called Opsidio. Opsidio will also be eligible for potential royalties and payments for reaching certain development and commercial milestones.