On Tuesday, Morgan Stanley (NYSE:MS) updated its outlook for Insmed (NASDAQ:INSM) Incorporated (NASDAQ:INSM), increasing the price target to $60 from the previous $43, while retaining an Overweight rating on the stock. The revision follows the release of promising ASPEN topline data, which has shifted focus to the drug's market potential and the speed at which it might be adopted.
The analyst from Morgan Stanley highlighted the significant commercial opportunity for Insmed's brensocatib in bronchiectasis, leading to an updated financial model. The firm has increased the probability of brensocatib's success in bronchiectasis to 85%, up from 60%, and has incorporated additional risk-adjusted revenues from European and Japanese markets into their projections.
Furthermore, the price assumption for brensocatib has been raised to $45,000, a slight increase over Fasenra's approximate $40,000 cost. This adjustment reflects a more optimistic outlook on the drug's pricing power, although the firm has somewhat tempered its market share growth expectations.
As a result of these changes, Morgan Stanley now estimates that peak risk-adjusted worldwide sales of brensocatib could surpass $3.1 billion. This new figure takes into account the adjusted success probability, international revenue potential, and updated pricing strategy, despite a more conservative market share trajectory.
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